Nail Pro Pty Ltd desires an after-tax profit of $15 000.If the tax rate is 30%,what is the before-tax profit that must be earned by Nail Pro Pty Ltd?

Question

Quizplus · Accepted Answer

To find the before-tax profit, we need to use the formula:

Before-tax profit = After-tax profit / (1 - Tax rate)

Substituting the values given in the question, we get:

Before-tax profit = 15 000 / (1 - 0.30)
Before-tax profit = 15 000 / 0.70
Before-tax profit = $21 429 (rounded to the nearest dollar)

Therefore, the best choice is C, as it is the only one that matches the calculated before-tax profit value.

Nail Pro Pty Ltd Desires an After-Tax Profit of $15