Schatz Corporation Generated $8,083,000 Ordinary Business Income and Recognized a $73,900

question 63

Multiple Choice

Schatz Corporation generated $8,083,000 ordinary business income and recognized a $73,900 net capital gain on the sale of assets.Which of the following statements is true?

• A)Schatz must pay tax at the regular corporate rate on $8,156,900 taxable income.
• B)Schatz must pay tax at the regular corporate rate on $8,083,000 taxable income.The $73,900 capital gain is eligible for a preferential tax rate.
• C)Schatz's net capital gain results in a permanent book/tax difference.
• D)None of the above is true.

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Definitions:

Marginal Costs

The increase in total cost that arises from an extra unit of production.

Marginal Benefit

The additional satisfaction or utility that a person receives from consuming an additional unit of a good or service.

Marginal Cost

The increase in total cost that arises from producing one additional unit of a product or service.

Marginal Cost

The increase or decrease in the total cost that arises when the quantity produced is incremented by one unit.