Acai Corporation determined that $5,000,000 of its R&D credit on its current year tax return was uncertain. Acai determined that there was a 40 percent chance of the credit being sustained on audit. Management made the following assessment of the company's potential tax benefit from the R&D credit and its probability of occurring. $\begin{array}{lll}
\begin{array}{r}
\text { Potential Estimated }\
\text { Benefit (000s) } \
\hline \$ \mathbf{5,0 0 0 , 0 0 0} \
\mathbf{3,50 0 , 0 0 0} \
\mathbf{2,00 0 , 0 0 0} \
0
\end{array}
\begin{array}{c}
\text {Individual Probability}\
\text { of Occurring (\%) } \
\hline 05 \
15 \
35 \
25\
\end{array}
\begin{array}{c}
\text { Cumulative Probability } \
\text { of Occurring } \
\hline 05 \
20 \
55 \
100
\end{array}
\end{array}$ Under ASC 740, what amount of the tax benefit related to the R&D credit can Acai recognize in calculating its income tax provision in the current year?

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The Answer of Acai Corporation determined that $5,000,000 of its R&D credit on its current year tax return was uncertain. Acai determined that there was a 40 percent chance of the credit being sustained on audit. Management made the following assessment of the company's potential tax benefit from the R&D credit and its probability of occurring. $\begin{array}{lll}
\begin{array}{r}
\text { Potential Estimated }\
\text { Benefit (000s) } \
\hline \$ \mathbf{5,0 0 0 , 0 0 0} \
\mathbf{3,50 0 , 0 0 0} \
\mathbf{2,00 0 , 0 0 0} \
0
\end{array}
\begin{array}{c}
\text {Individual Probability}\
\text { of Occurring (\%) } \
\hline 05 \
15 \
35 \
25\
\end{array}
\begin{array}{c}
\text { Cumulative Probability } \
\text { of Occurring } \
\hline 05 \
20 \
55 \
100
\end{array}
\end{array}$ Under ASC 740, what amount of the tax benefit related to the R&D credit can Acai recognize in calculating its income tax provision in the current year?

Acai Corporation Determined That $5,000,000 of Its R&D Credit on Its