Question

When sales of a particular hybrid automobile reach 60,000 units, federal income tax credits begin to phase out. One year after

reaching this threshold, buyers are still eligible for 15% of the original $2500 credit. What tax credit would buyers receive if they
purchased the vehicle at this time?

(Type a whole number or a decimal)

Answer 1

The original tax credit was $2500, so 15% of that is:

0.15 x $2500 = $375

Therefore, buyers would receive a $375 tax credit if they purchased the vehicle one year after the sales reached the 60,000 unit threshold.