Tyson Company Has a Pre-Tax Net Cash Inflow of $1,200,000

question 160

Multiple Choice

Tyson Company has a pre-tax net cash inflow of $1,200,000. The company can claim depreciation expense of $500,000 this year, and is subject to a combined income tax rate of 26%. What is the after-tax cash inflow for the year?

• A) $700,000.
• B) $1,018,000.
• C) $182,000.
• D) $370,000.
• E) $1,200,000.

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Definitions:

Operating Cash Flow

The amount of cash generated by a company's normal business operations, indicating whether a company is able to generate sufficient positive cash flow to maintain and grow its operations.

Variable Cost

Costs that vary directly with the level of production or volume of output, such as materials and labor.

Operating Leverage

A measure of how revenue growth translates into growth in operating income, determined by the company's fixed versus variable costs.

Financial Break-Even

The point at which total revenues are equal to total operational and financial costs, indicating a project or company is not losing money but not making profit either.