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S & C Company's net income before taxes is $400,000, and income tax expense is $125,000. S & C records a valuation allowance of $25,000.
S & C Company's net income before taxes is $400,000, and income tax expense is $125,000. S & C records a valuation allowance of $25,000. What is S & C's effective tax rate before and after recording the valuation allowance?
A. 31% and 38% respectively
B. 25% and 33% respectively
C. 31% and 25% respectively
D. There would not be a change in ETR because these are due to temporary differences
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