Last year the sales at Summit Corporation were $400,000 and were all cash sales. The expenses at Summit were $250,000 and were all cash expenses. The tax rate was 30%. The after-tax net cash inflow at Summit last year was:
A) $150,000
B) $45,000
C) $105,000
D) $400,000

Question

Quizplus · Accepted Answer

The formula for after-tax net cash inflow is: 
Sales - Expenses - Taxes 
= $400,000 - $250,000 - ($400,000 - $250,000) x 0.30 
= $400,000 - $250,000 - $45,000 
= $105,000 
Therefore, the after-tax net cash inflow at Summit last year was $105,000.

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