Question

Assume that the marginal tax rate is as follows: 10% for $0-$10,000; 15% for $10,000.01-$25,000; 20% for $25,000.01-$50,000; and 25% for $50,000.01 or more. Next, assume a business has an EBIT of $10,100 and an interest expense of $0. What would you expect the average tax rate on the ROA to be

Answer 1

e, 10.15%

Step-by-step explanation:

The computation of the average tax rate on the ROA is shown below

Given that the business has an EBIT of $10,100 and the interest expense is $0

So based on the given options, we can say that the expected average tax rate on the ROA is 10.15%

Therefore, the option e is correct

And, the same would be considered and relevant