Mulvaney Inc.ignored the effect of income taxes in its calculation of the sales volume needed to achieve a target profit of $1 000 000.If the company considers the impact of income taxes in its calculation,which of the following statements would be true?

Question

Quizplus · Accepted Answer

Considering the impact of income taxes will increase the sales volume needed to achieve the after-tax profit goal. This is because income taxes reduce the net profit of the company, increasing the amount of sales needed to make up for the tax expense. Thus, option C is the correct answer. Options A, B, and D are all incorrect because they do not accurately reflect the impact of income taxes on the calculations of target profit.