A Company Issued $1,000,000 of 10% Notes That Resulted in Interest

question 159

Multiple Choice

A company issued $1,000,000 of 10% notes that resulted in interest expense of $100,000 per year. What is the company's net cash outflow if the effective tax rate is 40%?

• A)$100,000
• B)$ 60,000
• C)$ 40,000
• D)$160,000

---

Definitions:

Fetishism

A psychiatric condition where sexual gratification is linked to a non-living object or a specific non-genital body part.

Inanimate Objects

Objects that lack life or consciousness, including items not capable of autonomous movement or biological functions.

Sexual Excitement

The arousal stage in human sexual response involving physiological and emotional changes.

Paraphilia

A condition characterized by abnormal sexual desires, typically involving extreme or dangerous activities.