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AMC will claim a tax credit of $60 million (direct reduction in taxes payable) this year. AMC also believes the likelihood that $60 million, $36
AMC will claim a tax credit of $60 million (direct reduction in taxes payable) this year. AMC also believes the likelihood that $60 million, $36 million, or $12 million tax credit will be sustained upon tax audit next year is 25%, 30%, and 45%, respectively. Otherwise, AMCs taxable income is $520 million for the year. The effective tax rate is 25%. What is AMCs income tax payable for the year?
| a. | $130 million. | |
| b. | None of the choices are correct. | |
| c. | $24 million. | |
| d. | $70 million. | |
| e. | $94 million. |
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