Last year,the sales at Seidelman Company were $700,000 and were all cash sales.The company's tax-deductible expenses were $450,000 and were all cash expenses.The tax rate was 35%.What was the after-tax net cash inflow at Seidelman last year?

Question

Quizplus · Accepted Answer

The after-tax net cash inflow can be calculated as:

Sales - Expenses = Net Income 
$700,000 - $450,000 = $250,000

Then, taking into account the tax rate:

Net Income x (1 - Tax Rate) = After-Tax Net Cash Inflow 
$250,000 x (1 - 0.35) = $162,500

Therefore, the after-tax net cash inflow at Seidelman last year was $162,500, which corresponds to choice letter B.

Last Year,the Sales at Seidelman Company Were $700,000 and Were