The amount of the taxes paid in dollars for the Irish operations is closest to:

Question

Quizplus · Accepted Answer

The taxes paid for Irish operations can be calculated as follows:
Taxes paid = (Tax rate * Taxable income) - Tax credit
Taxable income = Revenue - Expenses - Depreciation
Tax credit = 0.25 * R&D expenses
Tax rate = 12.5%

Taxable income = 500 - 300 - 50 = $150 million
R&D expenses = 10% of revenue = 0.1 * 500 = $50 million
Tax credit = 0.25 * 50 = $12.5 million

Taxes paid = (0.125 * 150) - 12.5 = $5.1 million

Therefore, the closest amount of taxes paid for Irish operations is $5.1 million, which is option B.

The Amount of the Taxes Paid in Dollars for the Irish