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Florida Citrus Inc. (FCI) estimates its taxable income at $9,000,000. 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 $1,500,000.
a) How much will FCI pay in federal income taxes next year if it does not produce the low-calorie sport drink?
b) How much will FCI pay in federal income taxes next year if it produces the low-calorie sport drink?
c) What is the after-tax net income difference between producing the low-calorie sport drink and not producing the low-calorie sport drink?
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