Problem:
Implification Corp. has sales of $4,250,000; the firm's cost of goods sold is $2,500,000; and its total operating expenses are $600,000. The firm's interest expense is $250,000, and the corporate tax rate is 40%.
Required:
Question 1: What is the firm's tax liability?
A) $258,000
B) $260,000
C) $360,000
D) $600,000
Explain in detail and show all work.