Angela Jones is considering two investments. The first produces $5,000 of tax-exempt income. The second produces income that will be subject to tax at a rate of 15%. Which of the following statements is true regarding Angela's choice?
A) Angela should always choose the first investment because it minimizes her tax costs.
B) If the second investment generates $5,500 of before-tax income, Angela should choose the first investment.
C) If the second investment generates $6,500 of before-tax income, Angela should choose the second investment.
D) Both B. and C. are true.
Correct Answer:
Verified
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