(Refer to Table 2.3.) Corporation Growth has $83,000 in taxable income, and Corp

Question

(Refer to Table 2.3.) Corporation Growth has $83,000 in taxable income, and Corporation Income has $8,300,000 in taxable income. (Enter your answer as directed, but do not round intermediate calculations.)

What is the tax bill for each firm?

Suppose both firms have identified a new project that will increase taxable income by $10,000. How much in additional taxes will each firm pay?

Table 2.3: http://lectures.mhhe.com/connect/0073382469/Images/table2.3.jpg

(Refer to Table 2.3.) Corporation Growth has $83,000 in taxable income, and Corporation Income has $8,300,000 in taxable income. (Enter your answer as directed, but do not round intermediate calculations.)

Explanation / Answer

1.

Corporation growth: Tax=15%*50000+25%*25000+34%*8000=16470

Corporation income: Tax=15%*50000+25%*25000+34%*25000+39%*235000+34%*(8300000-335000)=2822000

2.

Corporation Growth: 34%*10000=3400

Corporation Income: 34%*10000=3400

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