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When Considering the Net Cash Inflows Resulting from a Capital

Question 84

Multiple Choice

When considering the net cash inflows resulting from a capital budgeting decision, taxes will


A) reduce the amount of the cash savings by (1 + tax rate) .
B) increase the amount of the cash savings by the tax rate.
C) increase the amount of the cash savings by (1 - tax rate) .
D) reduce the amount of the cash savings by (1 - tax rate) .
E) increase the amount of the cash savings by (1 + tax rate) .

Correct Answer:

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