Zangari Corporation has provided the following information concerning a capital budgeting project:

The company uses straight-line depreciation on all equipment. Assume cash flows occur at the end of the year except for the initial investments. The company takes income taxes into account in its capital budgeting.

-The income tax expense in year 2 is:
A)$17,500
B)$52,500
C)$28,000
D)$10,500

Question

Zangari Corporation has provided the following information concerning a capital budgeting project:

The company uses straight-line depreciation on all equipment. Assume cash flows occur at the end of the year except for the initial investments. The company takes income taxes into account in its capital budgeting.

-The income tax expense in year 2 is:
A)$17,500 
B)$52,500 
C)$28,000 
D)$10,500

Quizplus · Accepted Answer

The income tax expense is calculated based on the taxable income and the tax rate. Without additional context or figures, option C is selected as the correct answer.

Zangari Corporation Has Provided the Following Information Concerning a Capital