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1. America's Airlines had pre-tax earnings of $12.5 million for 2019. Dalta had pre-tax

earnings of $11.5 million for the same year. America's Airlines realized capital gains of $2

million in 2019. Dalta realized capital gains of $4.5 million in the same year. Answer the

questions below. Please make sure to show your work.

a. Define marginal tax rate

b. Calculate the taxes due by each company using the corporate tax rate schedule

below.

c. Calculate the average tax rate for each company. ROUND TO 0.00%.