Mason Construction Inc. had net sales of $480,000, costs of sales of $130,000, additional expenses of $200,000, depreciation of $40,000, and a tax rate of 30%. Use this information to determine the firm's after tax earnings on a cash basis
A) $77,000
B) $105,000
C) $117,000
D) $145,000
C
Explanation: C) After-tax cash flow = (Sales - COGS - Dep)(1 - t) + Dep = ($480,000 - $130,000 - $200,000 - $40,000 )(1-.30 ) + $40,000 = $117,000.
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