Suppose You Sell a Fixed Asset for $75,000 When Its

question 95

Multiple Choice

Suppose you sell a fixed asset for $75,000 when its book value is $80,000. 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) $5,000
• B) $48,750
• C) $76,050
• D) $75,000

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Definitions:

Acceptance Theory

A management principle that suggests organizational efficiency depends on employees' acceptance of management decisions.

Vision

Vision is a term used to describe a clear sense of the future.

Present State

The current condition or status of a person, group, project, or system at a specific point in time.

Personal Power

The influence or authority a person has over others due to their skills, qualities, or personal attributes, as opposed to formal authority.