Assume a property has taxable income of $60,000 and the income tax is $15,000. What is the property’s after-tax cash flow?

Question

BlackTom AI · Accepted Answer

After-tax cash flow equals taxable income minus the income tax.

1. Relevant knowledge points and concepts
- Taxable income is the income amount on which tax is calculated (here given as $60,000).
- Income tax is the tax liability assessed on that taxable income (here $15,000).
- After-tax cash flow (net cash after taxes) = Taxable income − Income tax. Note: "before-tax cash flow" is a different concept, but it is not needed when taxable income is already provided.

2. Complete reasoning process step by step
Step 1: Record the given taxable income: $60,000.
Step 2: Record the given income tax: $15,000.
Step 3: Subtract the tax from the taxable income to find after-tax cash flow.

3. Calculations with intermediate steps
After-tax cash flow = Taxable income − Income tax
= $60,000 − $15,000
= $45,000

Intermediate arithmetic: 60,000 minus 10,000 is 50,000; minus the remaining 5,000 gives 45,000.

4. Why the correct answer is correct
The after-tax cash flow measures the amount remaining from taxable income after paying the tax liability. Since both the taxable income and the tax amount are specified, the straightforward subtraction yields the remaining cash: $45,000.

5. Why the other options are incorrect
- −$15,000: This is the tax amount but negative; it does not represent the net cash remaining and would imply a loss, which contradicts the positive taxable income given.
- "It cannot be determined without knowing the property’s before-tax cash flow.": Incorrect because taxable income is already provided; before-tax cash flow is unnecessary when calculating after-tax cash flow from taxable income and tax.
- $60,000: This is the pre-tax amount (taxable income), not the after-tax result; taxes have not been subtracted.

6. Conclusion
The correct after-tax cash flow is $45,000, which matches the provided answer of $45,000.

Assume a property has taxable income of $60,000 and the income tax is $15,000. What is the property’s after-tax cash flow?单项选择题

类似问题

Company X has net income of $532,695, dividends of $156,071, current share price of $14 per share, and 235,046 shares outstanding. What is the earnings per share ($/share)? If the answer is 10.4567, write 10.46.

Hoyes Lumber generally receives three checks per month. A check for $10,560 clears in 2 days, a check for $6,300 clears in 4 days, and a check for $7,570 clears in 3 days. Assuming 30 days in each month, what is the average daily float?

The Cincinnati Chili Kitchen has just announced the repurchase of $175,000 of its stock. The company has 49,000 shares outstanding and earnings per share of $3.49. The company stock is currently selling for $77.39 per share. What is the price-earnings ratio after the repurchase?

更多留学生实用工具

智能学习助手

风格化写作助手

论文查重助手

文献引用助手

课堂转译助手

课堂笔记助手

Quiz搜索助手

学校历年真题

智能刷题助手

智能匹配练习

希望你的学习变得更简单