Appalachian Airlines began operating in 2011. The company lost money the first year but has been profitable ever since. The company's taxable income (EBT) for its first five years is listed below. Each year the company's corporate tax rate has been 40%. Year Taxable Income 2011 -$5,500,000 2012 $1,000,000 2013 $2,000,000 2014 $3,000,000 2015 $5,000,000 Assume that the company has taken full advantage of the Tax Code's carry-back, carry-forward provisions and that the current provisions were applicable in 2011. How much did the company pay in taxes in 2014? a. $212,000 b. $176,000 c. $200,000 d. $224,000 e. $206,000

Financial Management: Theory & Practice
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Chapter2: Financial Statements, Cash Flow,and Taxes
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Appalachian Airlines began operating in 2011. The company lost
money the first year but has been profitable ever since. The
company's taxable income (EBT) for its first five years is listed
below. Each year the company's corporate tax rate has been 40%.
Year Taxable Income
2011 -$5,500,000
2012 $1,000,000
2013 $2,000,000
2014 $3,000,000
2015 $5,000,000
Assume that the company has taken full advantage of the Tax Code's
carry-back, carry-forward provisions and that the current
provisions were applicable in 2011. How much did the company pay
in taxes in 2014?
a. $212,000
b. $176,000
c. $200,000
d. $224,000
e. $206,000
Transcribed Image Text:Appalachian Airlines began operating in 2011. The company lost money the first year but has been profitable ever since. The company's taxable income (EBT) for its first five years is listed below. Each year the company's corporate tax rate has been 40%. Year Taxable Income 2011 -$5,500,000 2012 $1,000,000 2013 $2,000,000 2014 $3,000,000 2015 $5,000,000 Assume that the company has taken full advantage of the Tax Code's carry-back, carry-forward provisions and that the current provisions were applicable in 2011. How much did the company pay in taxes in 2014? a. $212,000 b. $176,000 c. $200,000 d. $224,000 e. $206,000
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