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Vast Ocean Corporation Has an Incentive Compensation Plan Under Which

Question 54

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Vast Ocean Corporation has an incentive compensation plan under which the sales manager receives a bonus equal to 10% of the company's income after deducting income taxes but before deducting the bonus.Income before income tax and the bonus is $80,000.The effective income tax rate is 40%.How much is the bonus?


A) $8,000
B) $5,000
C) $4,800
D) $4,320

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