Suppose You Sell a Fixed Asset for $10,000 When Its

question 107

Multiple Choice

Suppose you sell a fixed asset for $10,000 when its book value is $2,000. If your company's marginal tax rate is 21 percent, what will be the effect on cash flows of this sale (i.e., what will be the after-tax cash flow of this sale) ?

• A) $3,680
• B) $8,320
• C) $420
• D) $6,500

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Definitions:

Sales Promotion

Sales promotion consists of short-term incentives to encourage the purchase or sale of a product or service.

Long Term

Referring to an extended period of time, often focusing on strategic planning, investments, or goals that will take several years to achieve.

Customer Interest

The preferences, needs, and desires of consumers that influence their purchasing decisions.

Marketing Channels

The pathways through which goods and services flow from producer to the end consumer.