(Appendix 8C)The Moab Corporation had sales of $300, 000 and expenses of $175, 000 last year.All sales were cash sales and all expenses were cash expenses.Moab Corporation's tax rate is 30%.The after-tax net cash inflow at Moab last year was:
A)$210, 000
B)$37, 500
C)$52, 500
D)$87, 500

Question

Quizplus · Accepted Answer

The after-tax net cash inflow is calculated by first determining the pre-tax profit, which is sales minus expenses ($300,000 - $175,000 = $125,000). Then, calculate the tax by applying the tax rate (30% of $125,000 = $37,500). Subtract the tax from the pre-tax profit to get the after-tax net cash inflow ($125,000 - $37,500 = $87,500).

(Appendix 8C)The Moab Corporation Had Sales of $300, 000 and Expenses