Mr and Mrs

question 76

Multiple Choice

Mr. and Mrs. Dean own an investment that generated $60,000 cash revenue and required $12,000 cash expenses this year. The Deans' marginal tax rate is 25%. Which of the following statements is true?

• A) If only $52,000 of the revenue is taxable, but all the expenses are deductible, the Deans' after-tax cash flow is $40,000.
• B) If the revenue is taxable, but only $8,500 of the expenses are deductible, the Deans' after-tax cash flow is $38,625.
• C) The Deans' before-tax cash flow is $48,000.
• D) Both if the revenue is taxable, but only $8,500 of the expenses are deductible, the Deans' after-tax cash flow is $38,625 and the Deans' before-tax cash flow is $48,000.

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Definitions:

Optimum Temperature

The temperature at which a particular enzyme or metabolic process achieves its highest rate of activity.

Pancreatic Amylase

An enzyme produced by the pancreas that helps in the digestion of carbohydrates by breaking them down into simple sugars.

Salivary Amylase

An enzyme found in saliva that initiates the digestive process by breaking down starch into simpler sugars.

Biological Catalysts

Enzymes that speed up chemical reactions in the body without being consumed in the process.