Blossom Products is considering a special project that will increase sales revenue by $127,000 without affecting costs. If the company has a tax rate of 40%, what will be the after-tax income?
A) $ 50,800
B) $ 76,200
C) $127,000
D) $203,200

Question

Quizplus · Accepted Answer

To calculate after-tax income, we need to deduct the taxes from the increased sales revenue. The tax payable would be 40% of $127,000, which is $50,800. Therefore, the after-tax income would be $127,000 - $50,800 = $76,200. Thus, the best choice is option B.

Blossom Products Is Considering a Special Project That Will Increase