If an Old Asset Sells Below Book Value (UCC)and the Asset

question 109

Multiple Choice

If an old asset sells below book value (UCC) and the asset pool ends,from a tax standpoint:

• A) there is a decrease in cash flow.
• B) there is an increase in cash flow.
• C) there is no effect on cash flow.
• D) there is a decrease in net present value.

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Definitions:

Angel Capitalism

Investment in start-up companies by wealthy individuals, known as angel investors, who provide capital in exchange for equity or convertible debt.

Venture Capitalism

A form of private equity and financing that investors provide to startup companies and small businesses with long-term growth potential.

Factoring

A financial transaction where businesses sell their accounts receivable to a third party at a discount for immediate cash.

Same-Store Sales

A retail industry metric comparing the revenue earned from established stores in a certain period to the revenue during a similar period in the past.