Lintner Beverage Corp

question 33

Multiple Choice

Lintner Beverage Corp.reported the following information from their financial statements:
Operating income (EBIT) = $20,000,000
Interest payments on long-term debt = $1,750,000
Dividend income = $1,000,000
Calculate Lintner's total tax liability using the corporate tax schedule below:

• A)$6,167,875
• B)$6,492,500
• C)$6,817,125
• D)$7,157,982
• E)$7,515,881

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Definitions:

Regressive Tax

A tax imposed in such a manner that the tax rate decreases as the amount subject to taxation increases, disproportionately impacting those with lower incomes.

Tax Revenues

The money that governments procure from tax collection.

Local Governments

Administrative bodies in smaller geographical areas within a country that govern at a level below that of the state or federal government.

Expenditures

Expenditures are the expenses incurred by individuals, businesses, or governments in paying for goods and services.