Problem:
The Talley Healthcare System had a taxable income of $365,000 from operations after all operating costs but before (1) interest charges of $50,000, (2) dividends received of $15,000, (3) dividends paid of $25,000, and (4) income taxes.
Required:
Question 1: What are the firm's income tax liability and its after-tax income?
Question 2: What are the firm's marginal and average tax rates on taxable income?
Explain in detail.