Question
Here are the values I have been given. EBT 2019 = 600,000 EBT 2020 = 790,000 EBIT 2019 = 800,000 EBIT 2020 = 2,740,000 a)
Here are the values I have been given.
EBT 2019 = 600,000 EBT 2020 = 790,000 EBIT 2019 = 800,000 EBIT 2020 = 2,740,000
a) Compute combined corporate taxes for Company Corp for both 2019 and 2020. Here are two additional facts about Company Corp. 1) According to Canada Revenue it is a small corporation. 2) It is based in P.E.I and thus pays only 10% federal and 3.5% provincial tax on the first $500,000 it earns, and then pays 15% federal and 16% provincial tax on the remainder.
b) Calculate the NOPAT for 2019 and 2020. I know that the formula for NOPAT is EBIT - (1 - tax rate), but I got no clue how to use this formula given that the tax rates I am working with is not consistent.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started