ES-3083 Quiz #6 1. Consider the folowing data extracted from an After Tax Cash F

Question

ES-3083 Quiz #6 1. Consider the folowing data extracted from an After Tax Cash Flow calculation. Before Tax Cash Flow $15,500 Loan Principal Payment- $5,800 Loan Interest Payment $2,400 MACRS Depreciation Deduction $8,665 Taxable Income $4,435 Taxes Due = $1,774 (5 points) Find the after-tax cash flow. ? 15,500-2400-8665-1774 2. Determine the effective tax rate on a corporate taxable income of $150,000. (Table 9.1 is required for this question.) 5 points) 22250 +0.39 (150,000 -1000oo SO : 27.83% 150,000

Explanation / Answer

Formula for after tax cash flow would be:

After tax cash flow: Before tax cash flow + Depreciation - income tax liabilities
$15,500 + $8,665 - ($5,800 + $2,400 + $4,435 + $1,774)
$24,165 - $14,409
$9,756

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