Considering launching new line of plug-in electric suvs

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Reference no: EM131321334

Ford Motor Company is considering launching a new line of Plug-in Electric SUVs. The heavy advertising expenses associated with the new SUV launch would generate operating losses of $35 million next year. Without the new SUV, Ford expects to earn pre-tax income of $80 million from operations next year. Ford pays a 30% tax rate on its pre-tax income.

The amount that Ford Motor Company owe in taxes next year without the launch of the new SUV is closest to:

A) $24.0 million

B) $56.0 million

C) $31.5 million

D) $13.5 million

The amount that Ford Motor Company owe in taxes next year with the launch of the new SUV is closest to:

A) $13.5 million

B) $31.5 million

C) $56.0 million

D) $24.0 million

Reference no: EM131321334

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