Mr. Trail engaged in a current year transaction generating 50K cash but only 40K taxable income....
Mr. Trail engaged in a current year transaction generating 50K cash but only 40K taxable income. If marginal tax rate is 40% compute his after tax cash flow from the transaction?
Homework Answers
Ans :
Taxable income = $ 40,000
Tax (40%) = $ 40,000 * 40%
= $ 16,000
After tax cash flow = Cash generated - taxes paid
= $ 50,000 - $ 16,000
= $ 34,000.
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Mr. Trail engaged in a current year transaction generating 50K
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