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zepelin [54]
4 years ago
11

LO 3.2A company has wants to earn an income of $60,000 after-taxes. If the tax rate is 32%, what must be the company’s pre-tax

income in order to have $60,000 after-taxes?
$88,235
$19,200
$79,200
$143,000
Business
1 answer:
Keith_Richards [23]4 years ago
4 0

Answer:

$88,235

Explanation:

The computation of the pre tax income is shown below:

We know that

Income after tax = Income before tax (1 - tax rate)

$60,000 = Income before tax × (1 - 0.32)

$60,000 =  Income before tax × 0.68

So, the income before tax would be

= $60,000 ÷ 0.68

= $88,235

If we consider the tax rate than we can easily compute the income after tax

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