Last year the sales at Summit Corporation were $419,000 and were all cash sales. The expenses at Summit were $259,500 and were all cash expenses. The tax rate was 30%. The after-tax net cash inflow at Summit last year was:

Question

Quizplus · Accepted Answer

To calculate the after-tax net cash inflow, we first need to find the taxable income:

Sales - Expenses = Taxable Income 
$419,000 - $259,500 = $159,500

Then, we can calculate the taxes owed:

Taxable Income x Tax Rate = Taxes Owed 
$159,500 x 0.30 = $47,850

Finally, we can calculate the after-tax net cash inflow:

Sales - Expenses - Taxes Owed = After-Tax Net Cash Inflow 
$419,000 - $259,500 - $47,850 = $111,650

Last Year the Sales at Summit Corporation Were $419,000 and Were