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Jurisdiction B levies a flat 7 percent tax on the first $5 million of annual corporate income.
a. Jersey Inc. generated $3.9 million income this year. Compute Jersey’s income tax and determine its average and marginal tax rate on total income.
b. Leray Inc. generated $9.6 million income this year. Compute Leray’s income tax and determine Leray’s average and marginal tax rate on total income.
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