2. The Jacksonville Jaguars earn $175,000 in ordinary income in 2012. They also receive $150,000 in interest income and make a $50,000 payment out. Assuming a flat tax rate of 33%, calculate their taxes paid and after-tax profits.

3. Repeat problem #4, but use the following tax brackets. Income Bracket Tax Rate $0 to $35,000 5% $35,001 to $85,000 10% $85,001 to $110,000 15% $110,001 to $155,000 25% >$155,001 42%

4. What is the marginal and average tax rate for the Jaguars in this case? Which tax structure (flat or bracketed) would they prefer, based on your calculations?