Answer:
C. $2304
Explanation:
The annual, after-tax, revenue is:
$100 × 100 nights = 10000.
The tax rate is 28% of 10000 : 0.28 of 10000
Therefore 0.28 × 10000 = 2800.
Revenue = 10000 - 2800 =7200
The annual, after-tax, incremental revenue is:
$110 ×120 nights = 13200.
The tax rate is 28% of 13200 : 0.28 of 13200
Therefore 0.28 × 13200 = 3696
Incremental revenue = 13200 - 3696 = 9504
Then, the subtract the initial revenue from the new revenue.
9504 - 7200 = 2304
Therefore, the annual, after-tax, incremental revenue that John expects from his painting project is $2304
