Scorch & Burn Fire Extinguishers, Inc

question 9

Multiple Choice

Scorch & Burn Fire Extinguishers, Inc. had an operating income (EBIT) of $260,00 last year. The firm had $18,000 in depreciation expenses, $15,000 in interest expenses and $60,000 in selling, general, and administrative expenses. If Scorch & Burn has a marginal tax rate of 40%, what was its after-tax cash flow for last year?

• A) $165,000
• B) $129,000
• C) $174,000
• D) $147,000