1. Which of the following statements is true?
a. If a company proceeds with a mutually exclusive project, it eliminates others from consideration
b. If a company proceeds with an independent project, it eliminates others from consideration.
c. A company can do an unlimited number of mutually exclusive projects but can do only a few independent projects.
d. Independent projects are approved by the board and mutually exclusive projects need only management approval.
2. You are a shareholder in an S corporation. The corporation earns $10 per share. It will distribute the rest of its earnings to you as a dividend. The dividend is income to you, so you will then pay taxes on these earnings. your personal tax rate on dividend income is 28%. How much of the earnings remains after all taxes are paid?