Bryan Houlberg Expects His C Corporation to Generate a Profit

question 6

Multiple Choice

Bryan Houlberg expects his C corporation to generate a profit of $200,000. What is Bryan's after-tax cash flow from the corporation if net income after corporate tax is distributed to him as a dividend and his marginal tax rate on ordinary income is 37%?

• A) $120,800
• B) $90,188
• C) $126,400
• D) $158,000

---

Definitions:

Marginal Cost

The uptick in cumulative expenses that comes from producing an additional unit of a product or service.

Total Revenue

The total receipts from sales of a given quantity of goods or services.

Marginal Revenue

The supplementary financial gain obtained through the sale of one more unit of a good or service.

Profit

The financial gain obtained when the amount earned from a business activity exceeds the expenses, costs, and taxes.