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Assignment 3: Calculating Tax Cost
Microtech Software Corporation (MSC) was founded in 2001. The founder, Chan Li, studied at MIT and worked for a large software corporation before returning to his hometown, Centervale, to set up his own company.
The corporate tax rate structure applicable in Centervale is as follows:
Taxable IncomeTax Rate Up to $50,00015 percent From $50,001 through $150,00022 percent Income in excess of $150,00030 percentMSC has an opportunity to invest in a project that is expected to generate an additional $55,000 of taxable income.
Compute the tax cost of this additional income for the following three scenarios:
Show all the steps of the calculation and the final answer for each scenario. Compare the results for the three scenarios and comment on any differences.
Write a one- to two-page paper in MS Word format. Apply APA standards for writing style to your work.
Use the following file naming convention: LastnameFirstInitial_M1_A3.doc.
By Wednesday, June 28, 2017 deliver your assignment to the M1: Assignment 3 Dropbox.
a). MSC’s taxable income before the additional income is $45,000.plus the additional55,000=100,000tax;first 50,000 =50,000*15% =7,500next 50,000=50,000*22%=11,000total tax =18,500 b). MSC’s…
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