A company had tax-deductible cash expenses of $650,000 last year,and the tax rate was 30%.What was the after-tax net cash outflow for these expenses?

Question

Quizplus · Accepted Answer

The after-tax net cash outflow would be the amount of cash expenses minus the tax savings. 
Tax savings = cash expenses x tax rate = $650,000 x 0.30 = $195,000 
After-tax net cash outflow = cash expenses - tax savings = $650,000 - $195,000 = $455,000. Therefore, the correct answer is C).

A Company Had Tax-Deductible Cash Expenses of $650,000 Last Year,and