Revenue and expense cash flows must be multiplied by one minus the tax rate to get the after-tax cash flow.

Name: Revenue and expense cash flows must be multiplied by one minus the tax rate to get the after-tax cash flow.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

This is a correct statement. To calculate the after-tax cash flow, the revenue and expense cash flows must be adjusted for taxes by multiplying them by one minus the tax rate. This is because taxes reduce the amount of cash flow available for use by the business.

Revenue and Expense Cash Flows Must Be Multiplied by One