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Dalto Corporation is located in a state that taxes corporations at 4 % of the first $ 5 0 , 0 0 0 of taxable
Dalto Corporation is located in a state that taxes corporations at of the first $ of taxable income plus of any taxable income above $ Corporate income taxes paid to a state are deductible in determining a corporation's federal income tax liability. The corporate federal income tax rate is a flat of corporate taxable income. Dalto earned $ of income that is taxable by both the state and federal governments.
Required:
a Determine Dalto's state income tax obligation.
b Determine Dalto's federal income tax obligation.
c Determine the combined federal and state income tax total that Dalto has to pay.
d If Dalto were to add a new product line that increased its taxable income by $ how much extra income tax state plus federal would Dalto have to pay?
e What is the appropriate combined marginal tax rate that Dalto should use to evaluate new projects that would increase its taxable income?
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