Question : 61. Which of the following statements true regarding the impact of : 1295554

61. Which of the following statements is true regarding the impact of taxes on decision-making? 
A. The tax impact of a taxable receipt is an increase in cash flow.
B. Tax effects rarely influence decision-making.
C. The tax impact of a tax-deductible cost is an increase in cash flow.
D. Tax impacts only need to be considered when sales revenue is involved.

62. When comparing a “pre-tax cost” and an “after-tax cost”, which of the following is true? 
A. The after-tax cost will be greater than the pretax cost.
B. They will be the same amount.
C. The pre-tax cost will be greater than the after-tax cost.
D. The higher the tax rate, the lower the difference in the amount between them.

63. The after-tax benefit of a taxable cash receipt can be calculated as follows: 
A. After-tax benefit = Pretax receipt ´ Tax rate
B. After-tax benefit = Pretax receipt ´ (1 – Tax rate)
C. After-tax benefit = Pretax receipt ´ (1 + Tax rate)
D. After-tax benefit = Pretax receipt ? Tax rate

64. After-tax net income can be calculated as follows: 
A. After-tax income = Pretax income ´ Tax rate
B. After-tax income = Pretax income ? (1 – Tax rate)
C. After-tax income = Pretax income ´ (1 + Tax rate)
D. After-tax income = Pretax income ´ (1 – Tax rate)

65. The manager of a company is considering a special project that will increase sales revenue by $90,000 without affecting costs. If the company has a tax rate of 30%, what will be the after-tax revenue? 
A. $  63,000
B. $  27,000
C. $  90,000
D. $117,000

66. Blossom Products is considering a special project that will increase sales revenue by $60,000 without affecting costs. If the company has a tax rate of 25%, what will be the after-tax revenue? 
A. $  60,000
B. $  45,000
C. $  15,000
D. $105,000

67. Putnam Distributors is contemplating whether or not to accept a special order. Putnam wishes to have after-tax cash receipts of $5,200 if they accept the order. If Putnam has a tax rate of 35%, what is the price the customer should be charged for their order? 
A. $14,857
B. $  3,380
C. $  8,000
D. $  7,020

68. Triangle Associates is contemplating making a large charitable contribution. If their tax rate is 35%, what is the after-tax cost of making a $20,000 contribution? 
A. $27,000
B. $  7,000
C. $20,000
D. $13,000

69. Manning Inc. is contemplating the rental of a special tool for $3,000 per month. If their tax rate is 35%, what is the after-tax monthly cost of renting the tool? 
A. $1,950
B. $3,000
C. $1,050
D. $4,050

70. Portia’s Salon is contemplating an increase in their rental space that will result in a before-tax rent increase of $1,000 per month. If their tax rate is 30%, what is the after-tax monthly increase in rent cost? 
A. $1,000
B. $   700
C. $   300
D. $1,700

71. Beauregard Imports has pretax income of $75,000. If their tax rate is 35%, what will be their after-tax income? 
A. $  48,750
B. $123,750
C. $  26,250
D. $214,285

72. Blue Ridge Resorts has the following pretax information available for the current year:
 

Pretax receipts ——

$800,000

Pretax costs ———

300,000

Assuming all receipts are taxable and all costs are tax-deductible, what will be Blue Ridge’s after-tax net income for the year if their tax rate is 30%? 
A. $330,000
B. $150,000
C. $350,000
D. $770,000