Initial investment............... $80,000   Annual after-tax cash inflow............. ?   Salvage value........................ $0   Net present value................ $13,600   Life of the project................ 7 years   Discount rate........................ 12%   Based on the data given above, the annual cash inflow from the project after the initial investment is closest to... (assume the after-tax cash flows are the same each year)   Select one: a. $23,747 b. $32,894 c. $36,428 d. $22,766 e. $20,509

Q: am. 146.

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Deferred Tax

Deferred tax is an estimated future tax which is made while preparing accounts. It is estimated as a result of past and present transactions in the financial statements. It is not the actual tax which needs to be paid or refundable from the revenue authority, it is an accounting entry. It exists because of the difference between accounting profits and taxable profits.