Question:
Hyundai is considering opening a plant in two neighboring states.
Option 1: One state has a corporate tax rate of 10 percent. If operated in this state, the plant is expected to generate $1,015,000 pretax profit.
Option 2: The other state has a corporate tax rate of 2 percent. If operated in this state, the plant is expected to generate $960,000 of pretax profit.
a. What is the after state taxes profit in the state with the 10% tax rate?
After state tax profit ?
b. What is the after state taxes profit in the state with the 2% tax rate?
After state taxes profit ?