What is your implied marginal tax rate

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Reference no: EM131948642

1. As a winner of a lottery you are going to receive $10,000 every year forever, starting one year from today. If the appropriate discount rate is 8%, what is the present value of the award cash flows?

$100,000

$125,000

$40,000

$20,000

50,000

2. Assume the same risk for 30-year AAA Corporate bonds and 30-year Municipal Bonds. If you are indifferent between the two bonds what is your implied marginal tax rate?

25%

28%

29%

30%

32%

Reference no: EM131948642

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