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Petrodar oil company entered into a concessionary agreement with Namibia Government. Petrodar oil company agreed to pay the government 12% of gross production. The

 

Petrodar oil company entered into a concessionary agreement with Namibia Government. Petrodar oil company agreed to pay the government 12% of gross production. The gross sales of Petrodar oil Company in the first year was $ 12,000,000. production costs and drilling costs of Petrodar oil company were $1,000,000 and $10,000,000 respectively. The income tax laws of Namibia allow deduction of all production costs, with drilling costs deductible over a ten-year period. The taxable income of Petrodar was Select one: a $10,000,000 b. $8,560,000 c. $11,000,000 d. $9,000,000

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