KRU Company engaged in a current-year transaction that required a $20,000 cash outflow.Which of the following statements is true?
A) If the cash outflow is deductible and BMX's marginal tax rate is 20%,the tax savings from the transaction is $4,000.
B) If the cash outflow is deductible and BMX's marginal tax rate is 30%,the tax savings of the transaction is $6,000.
C) If the cash outflow is not deductible,the current-year tax savings of the transaction is zero.
D) All of the above are true.
Correct Answer:
Verified
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