Question

"Florida Citrus Inc. (FCI) estimates its taxable income at $5,500,000. The company is considering expanding its product line by introducing a low-calorie sport drink for next year. It expects that the additional taxable income next year from this sport drink will be $2,400,000. Use the Corporate Tax Schedule, Table 9.12, to compute the difference in the after-tax net income between producing the low-calorie sport drink and not producing the low-calorie sport drink. Enter your answer as a positive number."

Answer 1

Assuming 2017 year
Total taxable income with producing low calorie soft drink
Taxable Income	$5,500,000
Add: Taxable income from low calorie soft drink	$2,400,000
Total Taxable Income	$7,900,000
Less: Tax liability
113900+(34%*(7900000-335000))	2686000
After Tax net income	$5,214,000
Total taxable income without producing low calorie soft drink
Taxable Income	$5,500,000
Tax liability
113900+(34%*(5500000-335000))	1870000
After Tax net income	$3,630,000
	After tax net income
Total taxable income with producing low calorie soft drink	$5,214,000
Total taxable income without producing low calorie soft drink	$3,630,000
Difference	$1,584,000