When Assets Are Exchanged at a Loss in an Exchange

question 22

Multiple Choice

When assets are exchanged at a loss in an exchange lacking commercial substance,the basis of the new asset is usually

• A) the list price of the new asset.
• B) the book value of the old asset plus any cash paid on the trade-in.
• C) the fair market value of the new asset.
• D) either the book value of the old asset plus any cash paid on the trade-in or the fair market value of the new asset.

Describe the economic implications of population demographics on labor markets.

Assess the impact of discrimination coefficients on employer hiring practices.

Identify the effects of reducing or increasing discrimination within the labor market.

Understand the mechanisms and outcomes of occupational segregation and crowding.

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Definitions:

Present Value

The value today of a sum of money or cash flows expected in the future, calculated with a certain rate of return.

Compound Interest

Interest calculated on the initial principal and also on the accumulated interest of previous periods of a deposit or loan.

Earnings Rate

The rate at which an individual or corporation is taxed or the speed at which an investment grows.

Present Value Index

A ratio used in capital budgeting to evaluate the profitability of investments by comparing the present value of future cash flows to the initial investment cost.