Cold, inc.,reported a $100,000 total tax expense for financial statement purposes in year 1.this total expense consisted of $150,000 in current tax expense and a deferred tax benefit of $50,000.the deferred tax benefit consisted of $90,000 in deferred tax assets reduced by a valuation allowance of $40,000.in year 2,cold reports $600,000 in book net income before tax. cold records no other permanent or temporary book-tax differences. at the end of year 2, cold's auditors determine that the existing valuation allowance of $40,000 should be reduced to zero. what is cold's total tax expense for year 2?
a. $250,000
b. $126,000
c. $86,000
d. $40,000

At a student café, there are equal numbers of two types of customers with the following values. the café owner cannot distinguish between the two types of students because many students without early classes arrive early anyway (i.e., she cannot price-discriminate). students with early classes students without early classes coffee 70 60 banana 51 101 the marginal cost of coffee is 10 and the marginal cost of a banana is 40. the café owner is considering three pricing strategies: 1. mixed bundling: price bundle of coffee and a banana for 161, or just a coffee for 70. 2. price separately: offer coffee at 60, price a banana at 101. 3. bundle only: coffee and a banana for 121. do not offer goods separately. assume that if the price of an item or bundle is no more than exactly equal to a student's willingness to pay, then the student will purchase the item or bundle. for simplicity, assume there is just one student with an early class, and one student without an early class. price strategy revenue from pricing strategy cost from pricing strategy profit from pricing strategy 1. mixed bundling $ $ $ 2. price separately $ $ $ 3. bundle only $ $ $ pricing strategy yields the highest profit for the café owner.