Last year the sales at Summit Company were $400,000 and were all cash sales.The expenses at Summit were $250,000 and were all cash expenses.The tax rate was 40%.The after-tax net cash inflow at Summit last year was:

Question

Quizplus · Accepted Answer

First, calculate the before-tax net cash inflow: 
$400,000 (sales) - $250,000 (expenses) = $150,000 
Then, calculate the tax: 
$150,000 x 40% = $60,000 
Finally, subtract the tax from the before-tax net cash inflow: 
$150,000 - $60,000 = $90,000 
So the after-tax net cash inflow at Summit last year was $90,000.

Last Year the Sales at Summit Company Were $400,000 and Were