Engineering Economy 7th Edition by Leland Blank ,Anthony Tarquin

Exercise 85

In Denmark, VAT is applied at a rate of 25%, with few exceptions. Vendor A sells raw materials to vendor B for $60,000 plus VAT, vendor B sells a product to vendor C for $130,000 plus VAT, and vendor C sells an improved, value-added product to an end user for $250,000 plus VAT. Determine the following.
a) The amount of VAT collected by vendor B.
b) The amount of tax vendor B sends to Denmark's Treasury.
c) The total amount of tax collected by the Treasury department.