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During the year, Valdez Co. paid life insurance premiums of $400,000 on its executives. These...

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Accounting

During the year, Valdez Co. paid life insurance premiums of $400,000 on its executives. These life insurance premiums are never tax deductible expenses, but are business expenses when calculating financial income. Assuming a 40% tax rate and pretax financial income of $1,500,000, compute the effective tax rate for the current year.

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