Able Co.has $267,000 in taxable income and Bravo Co.has $1,600,000 in taxable income.Suppose both firms have identified a new project that will increase taxable income by $10,000.The additional project will increase Able Co.'s taxes by _____ and Bravo Co.'s taxes by ____: $\quad $$\quad $$\text { Taxable Income}$ $\quad $$\text { Tax Rate}$
$\begin{array}{|r|r|c|}
\hline \$ 0- & 50,000 & 15 \% \
\hline 50,001- & 75,000 & 25 \
\hline 75,001- & 100,000 & 34 \
\hline 100,001- & 335,000 & 39 \
\hline 335,001- & 10,000,000 & 34 \
\hline
\end{array}$

Question

Able Co.has $267,000 in taxable income and Bravo Co.has $1,600,000 in taxable income.Suppose both firms have identified a new project that will increase taxable income by $10,000.The additional project will increase Able Co.'s taxes by _____ and Bravo Co.'s taxes by ____: $\quad $$\quad $$\text {  Taxable Income}$ $\quad $$\text {  Tax Rate}$
$\begin{array}{|r|r|c|}
\hline \$ 0- & 50,000 & 15 \% \
\hline 50,001- & 75,000 & 25 \
\hline 75,001- & 100,000 & 34 \
\hline 100,001- & 335,000 & 39 \
\hline 335,001- & 10,000,000 & 34 \
\hline
\end{array}$

Quizplus · Accepted Answer

Able Co.'s taxable income falls in the $100,001-$335,000 range, so the tax rate is 39%. The additional tax is $10,000 * 39% = $3,900. Bravo Co.'s taxable income falls in the $335,001-$10,000,000 range, so the tax rate is 34%. The additional tax is $10,000 * 34% = $3,400.

Able CoHas $267,000 in Taxable Income and Bravo Co \quad

Able CoHas $267,000 in Taxable Income and Bravo Co $\quad$