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

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Definitions:

Bond Sinking Fund

A fund established by a debtor to repay or redeem bond debt before its maturity, ensuring financial security for bondholders.

Purpose

The reason for which something is done or created or for which something exists.

Paid Bondholders

The action of disbursing interest or principal payments to individuals or entities that hold a company's or government's bond.

Accrued Interest

The interest on a loan or bond that has accumulated since the principal investment, or since the last interest payment, if there has been one already.