A Firm Is Selling an Old Asset Below Book Value

question 31

Multiple Choice

A firm is selling an old asset below book value in a replacement decision.As the firm's tax rate is raised,the net cash outflow (purchase price less proceeds from the sale of the old asset plus CCA effects) would:

• A) go up.
• B) go down.
• C) remain the same.
• D) More information required.

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