Ms. Lenz has $100,000 in an investment paying 9% annual interest. Her marginal tax rate is 25%. Which of the following statements is false?

Question

Quizplus · Accepted Answer

A) The annual before-tax cash flow is calculated as 9% of $100,000, which equals $9,000. B) If the interest is tax-exempt, she keeps the entire $9,000, making the statement true. C) If the interest is taxable, she pays 25% of $9,000 ($2,250) in taxes, leaving her with $6,750 ($9,000 - $2,250), making this statement also true. Therefore, none of the statements are false.

Ms Lenz Has $100,000 in an Investment Paying 9% Annual