Question
Assume a corporation has earnings before depreciation and taxes of $100,000, depreciation of $40,000, and that it has a 30 percent tax bracket. What are the after-tax cash flows for the company?
Question 17 answers
Question 17 answers
Answers
drwls
Earnings AFTER depreciation is 60,000, and the (30%) tax on that taxable income is 18,000.
After-tax cash flow is then 100,000 - 18,000 = $82,000.
After-tax cash flow is then 100,000 - 18,000 = $82,000.