What would the after-tax revenue be, given a 30% tax rate?

Question

If a manager is considering a project that will increase sale revenue by $120 without effecting expenses?

A. $36

B. $84

C.$120

D.$150

Answer 1

is this a trick question?

after you pay tax, your "revenue" would still be $120. this is because revenue is ALL income (including tax paid).

your "net income," (whats left of your revenue) would then be $84 on that extra $120 of revenue.

so the way the question is asked, the answer is "c" (like always).