Financial Management: Theory & Practice
Financial Management: Theory & Practice
16th Edition
ISBN: 9781337909730
Author: Brigham
Publisher: Cengage
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Your corporation has the following cash flows solve this question general Accounting

Your corporation has the following cash flows:
Operating income $250,000
Interest received
10,000
Interest paid
45,000
Dividends received 20,000
Dividends paid
50,000
If the applicable income tax rate is 40 percent, and if 70 percent of
dividends received are exempt from taxes, what is the corporation's
tax liability?
A) $74,000
B) $88,400
C) $91,600
D) $100,000
E) $106,500
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Transcribed Image Text:Your corporation has the following cash flows: Operating income $250,000 Interest received 10,000 Interest paid 45,000 Dividends received 20,000 Dividends paid 50,000 If the applicable income tax rate is 40 percent, and if 70 percent of dividends received are exempt from taxes, what is the corporation's tax liability? A) $74,000 B) $88,400 C) $91,600 D) $100,000 E) $106,500
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