Taxing a Cashflow

Computations

Consider the example described in "The Compute Menu". To create the earnings, follow these steps:

Select Investment New Generic Cashflow to create a generic cashflow.
Enter CD_INTEREST for the Name.
Enter 1200 for each of the five years starting one year from today as displayed in Figure 9.2.
Click OK to return to the Investment Analysis dialog box.

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Figure 9.2: Computing the Interest on the CD

To compute the tax on the earnings, follow these steps:

Select CD_INTEREST from the Portfolio area.
Select Compute After Tax Cashflow from the pull-down menu.
Enter 30 for Federal Tax.
Enter 7 for Local Tax. Note that Combined Tax updates.
Click Create After Tax Cashflow and the After Tax Cashflow area fills, as displayed in Figure 9.3.

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Figure 9.3: Computing the Interest After Taxes

Save the taxed earnings to a dataset named WORK.CD_AFTERTAX. Click Return to return to the Investment Analysis dialog box.