A corporation with a taxable income of 50 million is


1. A corporation with a taxable income of $50 million is considering a new venture that would generate an additional $500,000 per year in taxable income. How much additional federal income tax will they pay on this additional income?

2. Susan has a marginal federal income tax rate of 28% and a marginal state income tax rate of 9%. If she earns an additional $4,000 job by working overtime, how much additional cash will she have after taxes?

3. A business purchases some equipment for $10,000 and depreciates it over a 5-year period using straight-line depreciation. The salvage value at the end of Year 5 is $2,000. What is the depreciation charge for Year 3?

4. The company described in the previous question has a marginal federal tax rate of 35%. Compute the reduction in their federal income tax during Year 3 due to that year's deprecation on the equipment.

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Financial Management: A corporation with a taxable income of 50 million is
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