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When Income Taxes Are Considered in Capital Budgeting, the Cash

Question 34

Multiple Choice

When income taxes are considered in capital budgeting, the cash flows related to a company's advertising expense would be correctly figured by taking the cash paid for advertising and:


A) adding the result of multiplying (advertising expense × tax rate) .
B) adding the tax rate.
C) adding the result of multiplying [advertising expense × (1 - tax rate) ].
D) subtracting the result of multiplying (advertising expense × tax rate) .
E) subtracting the result of multiplying [advertising expense × (1 - tax rate) ].

Correct Answer:

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