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AMC will claim a tax credit of $60 million (direct reduction in taxes payable) this...

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Accounting

AMC will claim a tax credit of $60 million (direct reduction in taxes payable) this year. AMC also believes the likelihood that $60 million, $36 million, or $12 million tax credit will be sustained upon tax audit next year is 25%, 30%, and 45%, respectively. Otherwise, AMCs taxable income is $520 million for the year. The effective tax rate is 25%. What is AMCs income tax payable for the year?

a.

$130 million.
b.

None of the choices are correct.
c.

$24 million.
d.

$70 million.
e.

$94 million.

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