View the step-by-step solution to:

# Get the step by step solution to this homework question now: Table 2.

Get the step by step solution to this homework question now:
Table 2.1 Corporate Tax Rate Schedule Tax calculation Range of taxable income Base tax + (Marginal rate x amount over base bracket) \$ 0 to \$ 50,000 \$ 0 + (15% x amount over \$ 0) 50,000 to 75,000 7,500 + (25 x amount over 50,000) 75,000 to 100,000 13,750 + (34 x amount over 75,000) 100,000 to 335,000 22,250 + (39 x amount over 100,000) 335,000 to 10,000,000 113,900 + (34 x amount over 335,000) 10,000,000 to 15,000,000 3,400,000 + (35 x amount over 10,000,000) 15,000,000 to 18,333,333 5,150,000 + (38 x amount over 15,000,000) Over 18,333,333 6,416,667 + (35 x amount over 18,333,333) P2-2 Average corporate tax rates - Using the corporate tax rate schedule given in Table 2.1, perform the following: a. Calculate the tax liability, after-tax earnings, and average tax rates for the following levels of corporate earnings before taxes: \$10,000; \$80,000; \$300,000; \$500,000; \$1.5 million; \$10 million; and \$20 million. b. Plot the average tax rates (measured on the y axis) against the pretax income levels (measured on the x axis). What generalization can be made concerning the relationship between these variables?

### Why Join Course Hero?

Course Hero has all the homework and study help you need to succeed! We’ve got course-specific notes, study guides, and practice tests along with expert tutors.

### -

Educational Resources
• ### -

Study Documents

Find the best study resources around, tagged to your specific courses. Share your own to gain free Course Hero access.

Browse Documents
• ### -

Question & Answers

Get one-on-one homework help from our expert tutors—available online 24/7. Ask your own questions or browse existing Q&A threads. Satisfaction guaranteed!

Ask a Question