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CTP · Question #642
CTP Question #642: Real Exam Question with Answer & Explanation
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Question
- (Topic 7) Three college roommates open a fast-food restaurant chain after graduation. They decide to offer a 401(k) plan to all of their 700+ employees and a defined benefit retirement plan for themselves and their six Group Vice Presidents. If the company initially funds the defined benefit plan with $10 million and is in the 32% tax bracket, what is the after-tax cost of the funding?
Options
- A$3.2 million
- B$6.8 million
- C$10.0 million
- D$13.2 million
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