Danny Ocean Corporation has an incentive compensation plan under which the sales manager receives a bonus equal to 10% of the company's income after deducting income taxes but before deducting the bonus. Income before income tax and the bonus is $80,000. The effective income tax rate is 40%. How much is the bonus?
A) $4,320
B) $4,800
C) $5,000
D) $8,000
Correct Answer:
Verified
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