Your Corporation Has the Following Cash Flows

Multiple Choice

Your corporation has the following cash flows:
Operating income :$250,000
Interest received:10,000
Interest paid:45,000
Dividends received:20,000
Dividends paid:50,000
If the applicable income tax rate is 40 percent,and if 70 percent of dividends received are exempt from taxes,what is the corporation's tax liability?

A) $74,000
B) $88,400
C) $91,600
D) $100,000
E) $106,500