KRU Company Engaged in a Current-Year Transaction That Required a $20,000

question 44

Multiple Choice

KRU Company engaged in a current-year transaction that required a $20,000 cash outflow.Which of the following statements is true?

• A)If the cash outflow is deductible and BMX's marginal tax rate is 20%,the tax savings from the transaction is $4,000.
• B)If the cash outflow is deductible and BMX's marginal tax rate is 30%,the tax savings of the transaction is $6,000.
• C)If the cash outflow is not deductible,the current-year tax savings of the transaction is zero.
• D)All of the above are true.

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