Business J operates in a jurisdiction that levies an income tax with the following rate structure. Percentage Rate Bracket 7% Income from –0– to $75,000 10 Income from $75,001 to $150,000 15 Income in excess of $150,000 Business J has the opportunity to invest in a project that should generate $35,000 additional taxable income for the year. Compute the tax cost of this additional income assuming that:
a. Business J’s taxable income before considering the additional income is $92,000.
b. Business J’s taxable income before considering the additional income is $400,000.
c. Business J has a $16,000 loss before considering the additional income.