BMX Company Engaged in a Current-Year Transaction That Generated a $20,000

question 49

Multiple Choice

BMX Company engaged in a current-year transaction that generated a $20,000 cash inflow. Which of the following statements is false?

• A) If the cash inflow is not taxable income, the current-year tax cost of the transaction is zero.
• B) If the cash inflow is taxable income and BMX's marginal tax rate is 25%, the tax cost of the transaction is $5,000.
• C) If the cash inflow is taxable income and BMX's marginal tax rate is 35%, the tax cost of the transaction is $7,000.
• D) None of these choices are false.

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