A not-for-profit nursing home has total expense of $20 million. Sales tax in the state is 7%. Expenses are broken down into salaries ($12 million), supplies ($6 million), and other miscellaneous not subject to tax ($2 million). The benefit received by the nursing home from the sales tax exemption is?

Question

Lamont Summers

Business

6 November, 17:01

A not-for-profit nursing home has total expense of $20 million. Sales tax in the state is 7%. Expenses are broken down into salaries ($12 million), supplies ($6 million), and other miscellaneous not subject to tax ($2 million). The benefit received by the nursing home from the sales tax exemption is?

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Answers (1)

Know the Answer?

Justice Chung · Answer 1

1.4 million

Explanation:

Given that,

Total expense = $20 million

Sales tax in the state = 7%

Expenses are broken down into:

salaries = $12 million

supplies = $6 million

Other miscellaneous not subject to tax = $2 million

Benefit received by the nursing home from the sales tax exemption:

= Total expenses * Sales tax in the state

= 20 million * 0.07

= 1.4 million