Moose Industries has a corporate tax rate of 25%.

Last year the company realized $11,500,000 in operating income (EBIT). Its annual interest expense is $1,400,000. What was the company's net income for the year?

a. $8,625,000

b. $9,675,000

c. $7,575,000

d. $10,100,000

e. $2,525,000

Lovell Company purchased preferred stock in another company. The preferred stock's before-tax yield was 10.00%. The corporate tax rate is 25%. What is the after-tax return on the preferred stock, assuming a 50% dividend exclusion? (Round your final answer to two decimal places.)

a. 5.00%

b. 2.50%

c. 6.25%

d. 7.50%

e. 8.75%

Alan and Sara Winthrop are a married couple who file a joint income tax return. They have two children, and they have legitimate itemized deductions totaling $25,750. Their total income from wages is $288,800. What is the couples taxable income?

a. $25,750

b. $263,050

c. $314,550

d. $237,300

e. $288,800