Portia's Salon is contemplating an increase in their rental space that will result in a before-tax rent increase of $14,500 per month. If their tax rate is 40%, what is the after-tax monthly increase in rent cost?

Question

Quizplus · Accepted Answer

To find the after-tax increase in rent cost, we need to first calculate the amount of taxes that will be paid on the $14,500 increase in rent:

Taxes = $14,500 * 0.4 = $5,800

The after-tax increase in rent cost is simply the before-tax increase minus the taxes paid:

After-tax increase = $14,500 - $5,800 = $8,700

Therefore, the answer is B) $8,700.

Portia's Salon Is Contemplating an Increase in Their Rental Space