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Vinny,IncHas an Incentive Compensation Plan Under Which the Sales Manager

Question 17

Multiple Choice

Vinny,Inc.has an incentive compensation plan under which the sales manager receives a bonus equal to 10 percent of the company's income after deductions for bonus and income taxes.Income before bonus and income taxes is $400,000.The effective income tax rate is 30 percent.How much is the bonus (rounded to the nearest dollar) ?


A) $40,000
B) $30,108
C) $28,000
D) $26,168

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