1/ Assuming a tax rate of 31%, the after-tax cost of a $196,000 dividend payment is

$60,760

$216,000

$126,000

$196,000

2/ Gerry Co. has a gross profit of $990,000 and $400,000 in depreciation expense. Selling and administrative expense is $120,000. Given that the tax rate is 45 percent, compute the cash flow for Gerry Co.

$119,955

$590,000

$658,500

$661,000

3/ The Bubba Corp. had earnings before taxes of $202,000 and sales of $2,020,000. If it is in the 43% tax bracket its after-tax profit margin is:

8.20%

5.70%

8.70%

7.70%