ST-2.

Gross profits Operating expenses Depreciation Taxable income

$1,000,000 500,000 350,000

$ 150,000 EARNINGS x MARGINAL TAX RATE TAXES

$50,000

$75,000-$50,000

$100,000-$75,000

$150,000-$100,000 x

x x

x 0.15 0.25 0.34 0.39

$ 7,500 6,250 8,500 19,500

$41,750