Suppose You Sell a Fixed Asset for $90,000 When Its

question 54

Multiple Choice

Suppose you sell a fixed asset for $90,000 when its book value is $95,000. 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) $3,000
• B) $5,000
• C) $91,050
• D) $90,000