Calculate the effective tax rate for a company that reports an income tax expense of $3.0 million,profit of $7.5 million,and income before taxes of $10.5 million.
A)28.5%
B)35%
C)40%
D)It cannot be computed with the above information

Question

Quizplus · Accepted Answer

Effective tax rate = Income tax expense / Income before taxes= $3.0 million / $10.5 million= 28.57% (rounded to 28.5%)

Calculate the Effective Tax Rate for a Company That Reports