Question

After-Tax Cash Flows
For each of the following independent situations, compute the net after-tax cash flow amount by subtracting cash outlays for operating expenses and income taxes from cash revenue. The cash outlay for income taxes is determined by applying the income tax rate to the cash revenue received less the cash and noncash (depreciation) expenses.

	A	B	C
Cash revenue received	$90,000	$450,000	$220,000
Cash operating expenses paid	54,000	315,000	145,000
Depreciation on tax return	12,000	30,000	20,000
Income tax rate	40%	30%	20%

Do not use negative signs with any of your answers below.

	A	B	C
Cash revenue	$Answer 0.00 points out of 1.00	$Answer 0.00 points out of 1.00	$Answer 0.00 points out of 1.00
Cash outlays:
Operating expenses	Answer 0.00 points out of 1.00	Answer 0.00 points out of 1.00	Answer 0.00 points out of 1.00
Income taxes	Answer 0.00 points out of 1.00	Answer 0.00 points out of 1.00	Answer 0.00 points out of 1.00
Total cash outlays	Answer 0.00 points out of 1.00	Answer 0.00 points out of 1.00	Answer 0.00 points out of 1.00
Net after-tax cash flow	$Answer 0.00 points out of 1.00	$Answer 0.00 points out of 1.00	$Answer

Answer 1

	A	B	C
Cash revenue received	90,000	4,50,000	2,20,000
Cash operating expenses paid	54000	315000	145000
Depreciation on tax return	12000	30000	20000
Income tax rate	40.00%	30.00%	20.00%
	A	B	C
Cash revenue	90,000	4,50,000	2,20,000
Cash outlays:
Operating expenses	54000	315000	145000
Income taxes	9,600	31,500	11,000
Total cash outlays	63600	346500	156000
Net after-tax cash flow	26,400	1,03,500	64,000
Working Note:
Income Tax Calculation:
	A	B	C
Cash revenue received	90000	450000	220000
Less: Cash Operating Exp	54000	315000	145000
Less: Depreciation on Tax Return	12000	30000	20000
Net Taxable Income	24000	105000	55000
Income tax rate	40%	30%	20%
Income Tax Expense(Taxable Income * Rate)	9600	31500	11000