Net income after taxes Greenfield Enterprises earned a pretax income of $500,000. Previously, the corporate tax rate was 25%,but a new tax law increased the rate to 30%. How does the change in tax rate affect net income, andwhat will be the new net income after taxes?

Step 1: Definition of Net Income After TaxesNet income after taxes, also known as after-tax income,…

Answered: Greenfield Enterprises earned a pretax…

Entrepreneurial Finance

6th Edition

ISBN:9781337635653

Author:Leach

Publisher:Leach

Chapter3: Organizing And Financing A New Venture

Section: Chapter Questions

Problem 7EP

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Greenfield Enterprises earned a pretax income of $500,000. Previously, the corporate tax rate was 25%, but a new tax law increased the rate to 30%. How does the change in tax rate affect net income, and what will be the new net income after taxes?