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problem: Collins Co. began operations in 2002.  The company lost money the first 2 years, but has been profitable ever since.  The company's taxable income (EBT) for its first 4 years are summarized below:

Year

EBT

2002

-$3.0 million

2003

-5.2 million

2004

4.2 million

2005

8.3 million

The corporate tax rate has remained at 40 percent.  Suppose that the company has taken full benefits of the Tax Code's carry-back; carry-forward provisions, and assume that the current provisions were applicable in 1999.  find out the Collins' tax liability for 2005.

[A]    $3.32 million

[B]    $0.04 million

[C]    $2.84 million

[D]    $1.72 million

[E]    $1.24 million

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