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3. The following information relates to Franklin Freightways for its first year of operations (data in millions of dollars): Pretax accounting income: $ 195 Pretax

3. The following information relates to Franklin Freightways for its first year of operations (data in millions of dollars):

Pretax accounting income:

$

195

Pretax accounting income included:

Overweight fines (not deductible for tax purposes)

5

Depreciation expense

70

Depreciation in the tax return

110

The applicable tax rate is 25%. There are no other temporary or permanent differences.

A). Compute Franklin's taxable income.

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