For a corporation in the 25% marginal tax bracket that incurs $70.00 in labor and materials expense,plus $15.00 in depreciation expense while generating an incremental revenue of $100.00,tax liability will increase by:

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Quizplus · Accepted Answer

The taxable income is $15 ($100 revenue - $70 labor/materials - $15 depreciation). The tax liability increase is 25% of $15, which is $3.75.

For a Corporation in the 25% Marginal Tax Bracket That