A capital proposal is projected to result in annual savings of $25,000.What is the after-tax cash flow if the tax rate is 35%?
A)$25,000
B)$16,250
C)$8,750
D)$7,500
E)$33,750

Name: A capital proposal is projected to result in annual savings of $25,000.What is the after-tax cash flow if the tax rate is 35%? A)$25,000 B)$16,250 C)$8,750 D)$7,500 E)$33,750
Brand: Quizplus
Rating: 4.9 (31 reviews)

Question

Quizplus · Accepted Answer

The after-tax cash flow can be calculated by subtracting the tax from the savings: 
$25,000 x (1 - 0.35) = $16,250. Therefore, the best choice is B.

A Capital Proposal Is Projected to Result in Annual Savings