Loomix Inc,is a company that has a history of losing money and has accumulated $100 million...
Loomix Inc,is a company that has a history of losing money and has accumulated $100 million in net operating losses. You expect the company to generate an operating loss of $50 million next year, followed by pre-‐tax operating profits of $75 million and $125 million in the following two years. If your marginal tax rate is 40%, how much will Loomix pay cumulatively as taxes in the next three years?
Group of answer choices
$90 million
$60 million
$20 million
$30 million
None of the above
Homework Answers
The losses of the period can be set off against the profits in future years
Hence, taxes in 3 years = (75+125-50-100)million *40%
= 20 million
Hence, the answer is $20 million
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