A company wants to set up operations in a country with the following corporate tax rate structure: Taxable Income $50,000 - $75,000 $75,000 - 34% $100,000 Therefore, a taxable income of $60,000 would result in taxes due of $50,000*0.15 + ($60,000-$50,000)*0.25 = $50,000*0.15 + $10,000*0.25 = $10,000 If the compay expects gross revenues of $500,000, $400,000 in total costs, $90,000 in allowable tax deductions and $7,000 in a one-time business start-up credit, how much should the company expect to pay in taxes? 0 $5,947 O $5,500 O $2,500 0 $1,500 Equipment that was purchased for $900,000 has a current book value of $450,000. Assume a capital gains tax rate of 28%. Compute the net tax payment or savings if you sell the equipment for $178,600. 0 $75,992, an increase in taxes O $7S,992, a savings on taxes O $271,400, a savings on taxes 0 $201,992, a savings on taxes Zeon, a large protable corporation, is considering adding some automatic equipment in its production facilities. An investment of $300,000 will produce an initial annual benet of $118,500, but the benets are expected to decline $3,000 per year. The rm uses SOYD depreciation, a 4 year useful life and $44,000 salvage value. Assume that the equipment can be sold for its $44,000 salvage value at the end of 4 years. Also assume a 46% income tax rate for state and federal taxes combined. The following After-Tax Cash Flow Table has been prepared. Before-Tax SOYD Income Taxes After-Tax Year Cash Flow Depreciation Taxable Income at 46% Cash Flow 118,500 64,000 54,500 25,070 93 430 115,500 64,000 51,500 23,690 91,810 112,500 64,000 48,500 22,310 90,190 153,500 64,000 89,500 41,170 112,330 Is it correct? If not, why not? Q It is correct. Q It is incorrect. Wrong depreciation used. Q It is incorrect. The money made when the equipment is sold in not included in the last year's cash flow. Q It is incorrect. The aftertax cash ow is wrong