Cost Management: A Strategic Emphasis 5th Edition by David Stout, Edward Blocher, Gary Cokins

Exercise 29

Given the following information, calculate the amount of after-tax profit for the period: sales, $260; expenses other than depreciation, $140; depreciation, $50; marginal income tax rate, 35 percent. Calculate the net after-tax cash flow effect of the preceding information. (Hint: You can use either a direct or an indirect approach to arrive at the appropriate answer.)

Step 1 of 2

Profit is the amount left when all the expenses are subtracted from the revenue. After-tax profit is the profit left after paying the due taxes to the government.