An Asset with a Book Value of $320,000 Is Sold

question 136

Multiple Choice

An asset with a book value of $320,000 is sold at a $240,000 pre- tax gain in a year when the tax rate is 40%. is the tax effect of the gain.

• A) A $656,000 cash outflow
• B) A $144,000 cash outflow
• C) A $96,000 cash outflow
• D) A $224,000 cash outflow

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Definitions:

Demand Stability

The condition in which the demand for a product or service does not experience sudden large fluctuations over time.

Learning Within Organizations

Processes or activities through which individuals and groups acquire, share, and apply knowledge and skills to improve organizational effectiveness.

Bullwhip Effect

The phenomenon where small fluctuations in demand at the retail level cause progressively larger fluctuations in demand at the wholesale, distributor, and manufacturer levels.

Behavioral Obstacles

Psychological and emotional barriers that influence individuals' decision-making processes and actions.