Yorketowne's city council opened a business park on the edge of the city. After five years, they had attracted two new manufacturers and four supporting service busi- nesses to the park. The total value of the property of all six businesses was $15,825,500. The compa- nies paid $0.78 per $1,000 of property value each year as property tax. In addition, the businesses employed 328 people at an average salary of $36,000. Each person paid a 1 percent city income tax each year.

$130,423.89

Explanation:

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To provide additional employment and add to its tax base from businesses, Yorketowne’s city council opened a business park on the edge of the city. After five years, they had attracted two new manufacturers and four supporting service businesses to the park. The total value of the property of all six businesses was $15,825,500. The companies paid $0.78 per $1,000 of property value each year as property tax. In addition, the businesses employed 328 people at an average salary of $36,000. Each person paid a 1 percent city income tax each year.

a. What is the total amount of taxes the city collected as a result of opening the business park?

b. In addition to the tax dollars, what other benefits might the city receive from opening the business park?

Solution A

Total amount of taxes the city collected =

Property tax paid by the companies + income tax by employees

=

= $12,343.89+$118,080

= $130,423.89 tax income per annum.

Solution B

Other benefits that might accrue to the city from opening the business park include.

a

explanation: