The planned operating income is calculated by ________.
A) dividing net income by tax rate
B) dividing net income by 1 - tax rate
C) multiplying net income by tax rate
D) multiplying net income by 1 - tax rate

Question

Quizplus · Accepted Answer

The planned operating income is calculated by dividing net income by 1 - tax rate. This is because net income is calculated by subtracting taxes from operating income. Therefore, to find the planned operating income, we would need to divide net income by 1 - tax rate to remove the impact of taxes on the calculation.

The Planned Operating Income Is Calculated by ________