Answer:
$35,000
Explanation:
Data provided in the question
Pre tax loss on sale of a component = $50,000
Income tax rate = 30%
So, the after tax loss on Division X is
= Pre tax loss on sale of a component - Pre tax loss on sale of a component × income tax rate
= $50,000 - $50,000 × 30%
= $50,000 - $15,000
= $35,000
We deduct the income tax rate from the pre tax loss so that the after tax loss could come
