Answer:
$822,512
Explanation:
For this question, the tax rate is as per schedule below
Tax Rate Taxable Income 15% $0 to $50,000 : 25% 50,001 - 75,000 :34 % 75,001 - 100,000: 39% 100,001 - 335,000 :34% 335,001 – 10,000,000: 35% 10,000,001 - 15,000,000: 38% 15,000,001 - 18,333,333 35
EBITDA represents earnings before interest, depreciation, and tax.
The amount to be taxed will be the EBITDA minus depreciation and the interest amount.
The interest to be paid is 7.5 % of $1,25 million
=7.5% x 1,250,000
=$93,750
taxable amount will be
=$3,145,903 - $93,750 - $633,000
=$2,419,153
According to the tax schedule, the rate applicable is 34%
The tax amount will be 34% of $2, 419,153
=34/100 x $2, 417,153
=.34 x $2,419,153
=$822,512.02
