The manager of a company is considering a special project that will increase sales revenue by $90 000 without affecting costs.If the company has a tax rate of 30 per cent,what will be the after-tax profit?
A) $ 63 000
B) $ 27 000
C) $ 90 000
D) $117 000

Question

Quizplus · Accepted Answer

The after-tax profit is calculated by subtracting the tax amount from the total revenue increase. With a 30% tax rate on a $90,000 revenue increase, the tax amount is $90,000 * 0.30 = $27,000. Subtracting this from the $90,000 increase gives an after-tax profit of $90,000 - $27,000 = $63,000.

The Manager of a Company Is Considering a Special Project