The Venoid Corporation has an annual cash inflow from operations from its investment in a capital asset of $16,000 each year for six years.The corporation's income tax rate is 30%.Calculate the total after-tax cash inflow from operations for six years.
A) $96,000
B) $67,200
C) $28,800
D) $16,000

Question

Quizplus · Accepted Answer

To calculate the after-tax cash inflow from operations, we need to multiply the annual cash inflow from operations by (1-T), where T is the income tax rate. 
So, After-tax cash inflow from operations for one year = 16,000 x (1- 0.30) = $11,200
Therefore, the total after-tax cash inflow from operations for six years = $11,200 x 6 = $67,200. 
The correct choice is B.

The Venoid Corporation Has an Annual Cash Inflow from Operations