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ID: 2812538 • Letter: S
Question
Secure https:/www.mathx.com/Student/PlayerHomework.aspx?homeworkid-5015915848questionld-18flushed-true&cid 52107068centerwin yes FIN 301 (1001-1004) Principles of Managerial Finance F18 Ronnessa Casas &1 9/1/18 7:12 F Homework: Chapter 1 Homework Score: 0 of 1 pt P1-7 (similar to) 70f 10 (7 complete) HW Score: 70%, 7 of 10 Question Help Marginal and average tax rates Using the tax rate schedule given here. perform the following $1.6 million; and $1.8 million these variables? a. Calculate the tax liability, after-tax eamings, and average tax rates for the following levels of partnership eamings before taxes: $1,200; $80,100: $305,00; $496,000, $12 million; b. Plot the average tax rates (measured on the y axia) against the pretax income levels (measured on the x axis), What genoralization can be made conceming the relationship betweo a. Find the marginal tax rate for the following levels of corporate eamings before taxesS 11.200: $80,100 $305,000; $496,000: $1,200,000, $1.8 million; and $1.8 million. The tax lablity for earnings bofore taxes of $11.200 is S(Round to the nearest dollar) Enter your answer in the answer box and then click Check Answer 22 partsning Clear All Check AnowerExplanation / Answer
Tax liability for earning before taxes of $11200 is = 10% of 9525 + 12% of (11200 - 9525)
= $953 + 12% of 1675
= $953 + $201
= $1154
After tax earning = $11200 - $1154 = $10046
Average tax rate = $1154/$11200 = 10.3%
Similarly we will do for other amounts as well
EBT Marginal tax rate Tax liability Earning after tax Average tax rate $ 11,200.00 12% $ 1,154.00 $ 10,046.00 10.30% $ 80,100.00 22% $ 13,562.00 $ 66,538.00 16.93% $ 305,000.00 35% $ 82,440.00 $ 222,560.00 27.03% $ 496,000.00 35% $ 149,290.00 $ 346,710.00 30.10% $ 1,200,000.00 37% $ 409,690.00 $ 790,310.00 34.14% $ 1,600,000.00 37% $ 557,690.00 $ 1,042,310.00 34.86% $ 1,800,000.00 37% $ 631,690.00 $ 1,168,310.00 35.09%