Question

Nashville imposes a net income tax on businesses operating within its jurisdiction. The tax equals 5%...

Nashville imposes a net income tax on businesses operating within its jurisdiction. The tax equals 5% of income up to $500,000 and 2% of income in excess of $500,000. Company K generated $750,000 net income this year. Compute the income tax that Company K owes to Nashville.

$30,000

$15,000

$26,250

$34,100

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Answer #1

Answer : $30000

=> The income tax that Company K owes to Nashville = $500000 * 5% + ($750000 - $500000) * 2% = $25000 + $5000 = $30000

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