The manager of a company is considering a special project that will increase sales revenue by $27,500 without affecting costs. If the company has a tax rate of 40%, what will be the after-tax income?
A) $16,500
B) $11,000
C) $27,500
D) $38,500

Question

Quizplus · Accepted Answer

The after-tax income is calculated by subtracting the tax amount from the total revenue increase. The tax amount is 40% of $27,500, which is $11,000. Therefore, the after-tax income is $27,500 - $11,000 = $16,500.

The Manager of a Company Is Considering a Special Project