What is new hope average tax rate and marginal tax rate

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New Hope Managed Care Inc. is a for-profit managed care company that serves the southwest United States. Last year, it reported $1,400,000 in income from operations, $260,000 in interest income from bonds it bought in the previous year, and $70,000 in dividend income from shares in a large drug company. New Hope also has $210,000 in surplus funds that it is considering investing in bonds that pay interest of $12,000 per year or stock that pays dividends of $11,000 per year. (please show work)

a. What is New Hope's tax liability?

b. What is New Hope's marginal tax rate?

c. What is New Hope’s average tax rate?

d. Should New Hope invest its surplus funds in bonds or stock?

Reference no: EM131817123

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