Marginal versus Average Tax Rates (Refer to Table 2.3.) Corporation Growth has $85,000 in taxable income, and
Question:
Marginal versus Average Tax Rates (Refer to Table 2.3.) Corporation Growth has $85,000 in taxable income, and Corporation Income has $8,500,000 in taxable income.
a. What is the tax bill for each firm?
b. Suppose both firms have identified a new project that will increase taxable income by
$10,000. How much in additional taxes will each firm pay? Why is this amount the same? LO.1
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