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Question: Suppose that Sharleen faces a marginal income tax rate of 35 percent, and if sbe cheats on her taxes, there is a 2 percent chance that she will be caught. Suppose also that the marginal penalty of tax evasion is 101, where I is the amount of unreported income (in thousands of dollars). How much income will Sharleen fail to report?

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Basic Finance, Finance

Category:- Basic Finance
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