In: Finance
Assuming a 21 percent marginal tax rate, compute the after-tax
cost of the following business expenses:
1.
a. Because the property and casualty insurance premium is deductible, the after-tax cost is$5,214 ($6,600 – [$6,600 × 21%]).
b.Because the fine is nondeductible, the after-tax cost is $2,200.
c.Because the life insurance premium is nondeductible, the after-tax cost is $4,700
d.Because the political contribution is nondeductible, the after-tax cost is $60,000
e.Because only 50 percent of the entertainment expense is deductible, the after-tax cost is $7,876 ($8,800 – [$4,400 × 21%])