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Hyundai is considering opening a plant in two neighboring states. Option 1: One state has a corporate tax rate of 10 percent. If operated in this state, the plant is expected to generate $1,000,000 pretax profit. Option 2: The other state has a corporate tax rate of 2 percent. If operated in this state, the plant is expected to generate $930,000 of pretax profit. What is the after state taxes profit in the state with the 10% tax rate?

Respuesta :

Answer:

after state tax profit is $900,000

Explanation:

given data

pre tax profit = $1,000,000

tax rate = 10 %

to find out

What is the after state taxes profit in the state

solution

we know here After Tax Profit in State with 10% Tax Rate will be

tax = 10%  of $1,000,000

tax = 100,000

so

after state tax profit will be

after state tax profit = pretax profit - tax

after state tax profit = $1,000,000 - $100,000

after state tax profit is $900,000

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