Assignment 3: Calculating Tax Cost

Assignment 3: Calculating Tax Cost
Microtech Software Corporation (MSC) was founded in 2001. The founder, Chan Li, studied at MIT and worked for a large software corporation before returning to his hometown, Centervale, to set up his own company.
The corporate tax rate structure applicable in Centervale is as follows:
  Taxable IncomeTax Rate  Up to $50,00015 percent  From $50,001 through $150,00022 percent  Income in excess of $150,00030 percent
MSC has an opportunity to invest in a project that is expected to generate an additional $55,000 of taxable income.
Compute the tax cost of this additional income for the following three scenarios:

MSC’s taxable income before the additional income is $45,000.
MSC’s taxable income before the additional income is $300,000.
MSC has a loss of $5,000 before considering the additional income.

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Show all the steps of the calculation and the final answer for each scenario. Compare the results for the three scenarios and comment on any differences.
Write a one- to two-page paper in MS Word format. Apply APA standards for writing style to your work.

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