Target net income is computed by multiplying operating income by one minus the entity's tax rate, or by multiplying operating income by the tax rate, and subtracting that amount from operating income.

Question

Quizplus · Accepted Answer

Target net income is calculated by subtracting taxes from operating income, which can be done by multiplying operating income by the tax rate and subtracting that from operating income, or by multiplying operating income by one minus the tax rate.

Target Net Income Is Computed by Multiplying Operating Income by One