Lisa is considering investing $60,000 in a limited partnership that is raising additional capital. According to the prospectus, for the past 10-year period, the average earnings have been 12% and for the past 5-year period, the average earnings have been 9%. Lisa is in the 24% tax bracket.

a. List some factors Lisa should consider in making a decision on the potential investment.
b. Assuming the partnership finances its activities with equity rather than debt, what is the
maximum cash flow benefit Lisa can receive if the partnership generates losses?

Question

Lisa is considering investing $60,000 in a limited partnership that is raising additional capital. According to the prospectus, for the past 10-year period, the average earnings have been 12% and for the past 5-year period, the average earnings have been 9%. Lisa is in the 24% tax bracket.

a. List some factors Lisa should consider in making a decision on the potential investment.
b. Assuming the partnership finances its activities with equity rather than debt, what is the
maximum cash flow benefit Lisa can receive if the partnership generates losses?

Quizplus · Accepted Answer

The Answer of Lisa is considering investing $60,000 in a limited partnership that is raising additional capital. According to the prospectus, for the past 10-year period, the average earnings have been 12% and for the past 5-year period, the average earnings have been 9%. Lisa is in the 24% tax bracket.

a. List some factors Lisa should consider in making a decision on the potential investment.
b. Assuming the partnership finances its activities with equity rather than debt, what is the
maximum cash flow benefit Lisa can receive if the partnership generates losses?

Lisa Is Considering Investing $60,000 in a Limited Partnership That