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

question 71

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 the above is false.

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Definitions:

Fertilization

The fusion of male and female gametes, resulting in the formation of a zygote that can develop into a new organism.

Mathematical Model

A representation of a system using mathematical concepts and language, used to study the behavior of complex systems.

Asexual Reproduction

The generation of offspring without the fusion of gametes, resulting in genetically identical copies of the parent.

Prostate Gland

A gland in male animals that produces an alkaline secretion that is part of the semen.