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
