The tax liability for earnings before taxes of $81,300 is $ (Round to the nearest dollar.)

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Corporate Tax Rate Schedule
Tax calculation
Range of taxable income
Base tax
(Marginal ratex amount over base bracket)
$0 to
(15%
(25%
(34%
(39%
(34%
(35%
(38%
(35%
$50,000
$0
$0)
50,000)
75,000)
100,000)
335,000)
10,000,000)
15,000,000)
18,333,333)
+
x amount over
50,000 to
75,000
7,500
x amount over
+
75,000 to
100,000 to
100,000
13,750
22,250
x amount over
x amount over
+
335,000
335,000 to
10,000,000
113,900
x amount over
10,000,000 to
15,000,000
3,400,000
x amount over
15,000,000 to
18,333,333
5,150,000
x amount over
Over 18,333,333
6,416,667
x amount over
+
Transcribed Image Text:Corporate Tax Rate Schedule Tax calculation Range of taxable income Base tax (Marginal ratex amount over base bracket) $0 to (15% (25% (34% (39% (34% (35% (38% (35% $50,000 $0 $0) 50,000) 75,000) 100,000) 335,000) 10,000,000) 15,000,000) 18,333,333) + x amount over 50,000 to 75,000 7,500 x amount over + 75,000 to 100,000 to 100,000 13,750 22,250 x amount over x amount over + 335,000 335,000 to 10,000,000 113,900 x amount over 10,000,000 to 15,000,000 3,400,000 x amount over 15,000,000 to 18,333,333 5,150,000 x amount over Over 18,333,333 6,416,667 x amount over +
Average corporate tax rates Using the corporate tax rate schedule given here i, perform the following:
a. Calculate the tax liability, after-tax earnings, and average tax rates for the following levels of corporate earnings before taxes: $12,000; $81,300; $295,000; $502,000; $1.7 million; $9.1
million; and $20.3 million.
b. Plot the average tax rates (measured on the y axis) against the pretax income levels (measured on the x axis). What generalization can be made concerning the relationship between
these variables?
....
a. Find the marginal tax rate for the following levels of corporate earnings before taxes: $12,000; $81,300; $295,000; $502,000; $1,700,000; $9.1 million; and $20.3 million.
The tax liability for earnings before taxes of $12,000 is $ 1800 . (Round to the nearest dollar.)
The after-tax earnings on $12,000 are $ 10200. (Round to the nearest dollar.)
The average tax rate for the $12,000 in pretax earnings is 15 %. (Round to one decimal place.)
The tax liability for earnings before taxes of $81,300 is $
(Round to the nearest dollar.)
Transcribed Image Text:Average corporate tax rates Using the corporate tax rate schedule given here i, perform the following: a. Calculate the tax liability, after-tax earnings, and average tax rates for the following levels of corporate earnings before taxes: $12,000; $81,300; $295,000; $502,000; $1.7 million; $9.1 million; and $20.3 million. b. Plot the average tax rates (measured on the y axis) against the pretax income levels (measured on the x axis). What generalization can be made concerning the relationship between these variables? .... a. Find the marginal tax rate for the following levels of corporate earnings before taxes: $12,000; $81,300; $295,000; $502,000; $1,700,000; $9.1 million; and $20.3 million. The tax liability for earnings before taxes of $12,000 is $ 1800 . (Round to the nearest dollar.) The after-tax earnings on $12,000 are $ 10200. (Round to the nearest dollar.) The average tax rate for the $12,000 in pretax earnings is 15 %. (Round to one decimal place.) The tax liability for earnings before taxes of $81,300 is $ (Round to the nearest dollar.)
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