The taxpayer's marginal tax bracket is 25%. Which would the taxpayer prefer?
a. $1.00 taxable income rather than $1.25 tax-exempt income.
b. $1.00 taxable income rather than $.75 tax-exempt income.
c. $1.25 taxable income rather than $1.00 tax-exempt income.
d. $1.40 taxable income rather than $1.00 tax-exempt income.
e. None of these.
Answer: d 1.40 taxable income rather than $1.00 tax-exempt income