A firm generates sales of $250,000,depreciation expense of $50,000,taxable income of $50,000,and has a 35% tax rate.By how much does net cash flow deviate from net income?
A) $17,500
B) $50,000
C) $67,500
D) $82,500

Question

Quizplus · Accepted Answer

Net cash flow deviates from net income by the amount of depreciation, which is a non-cash expense. Here, the depreciation expense is $50,000.

A Firm Generates Sales of $250,000,depreciation Expense of $50,000,taxable Income