A company that desires after tax income of $1,000,000 with a 40% tax rate, needs a before tax income of

Name: A company that desires after tax income of $1,000,000 with a 40% tax rate, needs a before tax income of
Brand: Quizplus
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Question

Quizplus · Accepted Answer

To achieve an after-tax income of $1,000,000 with a 40% tax rate, the company needs to earn more before taxes. The formula to calculate the required before-tax income is: After Tax Income / (1 - Tax Rate). Plugging in the numbers: $1,000,000 / (1 - 0.40) = $1,000,000 / 0.60 = $1,666,667.

A Company That Desires After Tax Income of $1,000,000 with a 40