3. RDP Networking reported pretax accounting income in 2016, 2017, and 2018 of $70 million, $100 million, and $100 million, respectively. The 2016 income statement includes a expense that is deducted for tax purposes when paid in 2017 ($15 million) and 2018 ($15 million). The income tax rate is 40% each year. $30 million warranty 2017 100 2018 100 2016 Pre-accounting Income 70 Add: Warranty Expense 30 from IS Subtract: Warranty Expense from tax return Taxable Income (15) (15) 100 85 85 Return