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A Company Issued $1,000,000 of 10% Notes That Resulted in Interest

Question 103

Multiple Choice

A company issued $1,000,000 of 10% notes that resulted in interest expense of $100,000 per year. What is the company's net cash outflow if the effective tax rate is 40%?


A) $100,000
B) $ 60,000
C) $ 40,000
D) $160,000

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