The Bubba Corp. had earnings before taxes of $202,000 and sales of $2,020,000.
If it is in the 51% tax bracket, its after-tax profit margin is:
Profit margin is the profit earned from any business expressed in the form of a percentage. It is calculated by dividing the before-tax profit by Net sales of a firm. However, the after-tax margin is the main indicator of the profitability of any enterprise.
Answer and Explanation:
After-tax profit = $202,000 x (1 - 0.51) = $98,980
After-tax profit margin = $98,980 / $2,020,000 = 0.049 or 4.9%
Option d is correct.
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from Financial Accounting: Help and ReviewChapter 5 / Lesson 27