XYT Company Engaged in a Transaction That Generated $50,000 Cash

question 36

Multiple Choice

XYT Company engaged in a transaction that generated $50,000 cash deposited in the company bank account and required the company to pay $12,000 out of that account. XYT's marginal tax rate is 30%. Which of the following statements is false?

• A) If the deposit is taxable income and the payment is deductible, the transaction generated $26,600 after-tax cash flow.
• B) If the deposit is taxable income but the payment is nondeductible, the transaction generated $35,000 after-tax cash flow.
• C) If the deposit is not taxable income and the payment is nondeductible, the transaction generated $38,000 after-tax cash flow.
• D) None of these choices are false.

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Definitions:

High Relapse Rate

The tendency for a condition or behavior to return after an apparent recovery, often noted in the context of addiction or mental health.

Internet Gaming Disorder

Persistent engagement and preoccupation with Internet and video gaming, with symptoms of tolerance, withdrawal, loss of interest in other activities, and clinically significant impairment or distress.

Clinically Significant Impairment

A level of impairment in functioning that is significant enough to warrant attention or intervention from healthcare or educational professionals.

Persistent Engagement

Continuous involvement or effort in an activity or task, maintaining interest over a longer period.