A Company Has $3

question 93

Multiple Choice

A company has $3.25 million in revenue and has a revenue cost of $1 million. Which of the following statements is true?

• A) In order to have a net income of more than $1.5 million, the operating expenses and income taxes need to be less than $0.25 million.
• B) In order to have a net income of more than $1.5 million, the operating expenses and income taxes need to be less than $0.75 million.
• C) In order to have a net income of more than $1.5 million, the operating expenses and income taxes need to be less than $1.75 million.
• D) In order to have a net income of more than $1.5 million, the operating expenses and income taxes need to be less than $2.25 million.
• E) In order to have a net income of more than $1.5 million, the operating expenses and income taxes need to be less than $2.75 million.

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Definitions:

Deductions

Expenses or specific amounts that can be subtracted from one's gross income to reduce the taxable income.

Rate Structure

The system or plan for pricing services, often used in reference to utilities like electricity, water, and telecommunications, outlining how rates vary based on usage levels or time of use.

Tax Base

The measure or value upon which a tax is levied.

Incidence

In economics, the allocation or distribution of a tax's economic burden between buyers and sellers.