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After-tax earnings

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Assume the pre-tax profit of $50,000 has been earned by a business, and the owner/proprietor wants to withdraw all of the after-tax profit for personal use. Assume the tax rate for a C corporation is 33%, while the rate for a person is 25%. Find the after-tax earnings available under the corporate and proprietorship forms of business.

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Solution Summary

The solution shows the exact calculations for determining after-tax earnings for a corporation and a sole proprietorship.

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The pre-tax profit is $50,000 and the owner wants all money after taxes have been paid for personal ...

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