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When a firm reports a nondeductible fine as an expense they calculate income tax expense as: pre-tax book income multiplied by the income tax rate.

When a firm reports a nondeductible fine as an expense they calculate income tax expense as:

pre-tax book income multiplied by the income tax rate.

pre-tax book income plus the fine amount multiplied by the income tax rate.

pre-tax book income less the fine amount multiplied by the income tax rate.

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