The After-Tax Cost of an Asset Increases If

question 39

Multiple Choice

The after-tax cost of an asset increases if

• A)The cost recovery period is increased
• B)The marginal tax rate increases
• C)The discount percentage decreases
• D)The asset's salvage value increases

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Definitions:

Plant And Equipment

Long-term tangible assets used in the operations of a business, not intended for resale.

Useful Lives

The expected period of time during which an asset is expected to be usable for the purpose it was acquired.

Revenue

The total amount of money generated from the sale of goods or services, before any expenses are subtracted.

Accumulated Depreciation

Accumulated Depreciation is the total amount of depreciation expense that has been allocated to a tangible asset since it was put into use, reducing its book value.