Pizza Company Has $70,000 of Depreciation Expense and Is Subject

question 87

Multiple Choice

Pizza Company has $70,000 of depreciation expense and is subject to a 30% income tax rate. On an after-tax basis, depreciation results in a:

• A) $21,000 inflow.
• B) $21,000 outflow.
• C) $49,000 inflow.
• D) $49,000 outflow.
• E) neither an inflow nor an outflow because depreciation is a noncash expense.