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