Chapter 3 Est. Length: 2:00:00 ina Thornhill: Attempt 1 Save Question 18 (1 poin

Question

Chapter 3 Est. Length: 2:00:00 ina Thornhill: Attempt 1 Save Question 18 (1 point) D Sal?nger Software was founded in 2012. The company lost money each of its first three years, but was able to turn a profit in 2015. Salinger's operating income (EBIT) for its first four years of operations is reported below Year 2012 2013 2014 2015 -$50,000,000 $150,000,000 $100,000,000 $700,000,000 The company has no debt, so operating income equals earnings before taxes. The corporate tax rate has remained constant at 35%. Assume that the company took full advantage of the carry back, carry-forward provisions m the Tax Code, and assume that the current provisions were applicable in 2012 How much tax did the company pay in 2015? $147,000,000 S165,200,000 $158,200,000 $140,000,000 $107,800,000 Save Question 19 (1 point)E E 15

Explanation / Answer

total carry forward of losses = -50,000,000 + -150,000,000+ -100,000,000

= 300,000,000

Profit = $ 700,000,000 tax carry forward of $ -300,000,000

= $400,000,000*0.35

=$140,000,000

so the correct answer is $140,000,000

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