Your corporation has the following cash flows: Operating income$250,000Interest received$10,000Interest paid$45,000Dividends received$17,000Dividends paid$50,000? If the applicable income tax rate is 40% (federal and state combined), and if 70% of dividends received are exempt from taxes, what is the corporation's tax liability?
A. $87,160
B. $88,040
C. $80,116
D. $108,289
E. $77,475
Answer: B
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