Company EJ plans to build a new plant to manufacture bicycles. EJ sells its bicycles...
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Company EJ plans to build a new plant to manufacture bicycles. EJ sells its bicycles in the world market for $550 per bike. It could locate the plant in Province P, which levies a 25 percent tax on business income. On the basis of the cost of materials and labor in Province P, EJ estimates that its manufacturing cost per bike would be $332. Alternatively, EJ could locate the plant in Province W, which levies a 20 percent tax on business income. On the basis of the cost of materials and labor in Province W, EJ estimates that its manufacturing cost per bike would be $350. Required: a. Calculate the after-tax profit per bike for each province. b. In which province should Company EJ build its new plant? Complete this question by entering your answers in the tabs below. Complete this question by entering your answers in the tabs below. Calculate the after-tax profit per bike for each province. Note: Deductions should be indicated by a minus sign. Round your Intermediate calculations and final answers to the nearest whole dollar amount
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