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Suppose that in addition to $18.00 million of taxable income, Texas Taco, Inc., received $8,200,000 of interest on state-issued bonds and $720,000 of dividends on common stock it owns in Arizona Taco, Inc.
a. Use the tax schedule in Table 2.3 to calculate Texas Taco's income tax liability. (Enter your answer in dollars not in millions.
Income tax liability$
b. What are Texas Taco's average and marginal tax rates on taxable income? (Round your answers to 2 decimal places.)
Average tax rate %
Marginal tax rate %
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