If an Asset Has a Positive Salvage of $1,000, Exactly

question 37

Multiple Choice

If an asset has a positive salvage of $1,000, exactly equal to UCC, then the lease analysis for an asset alone in its pool will show the following cash flows for that phenomenon. If the asset described above were not alone in its pool, so the pool continued after the leased asset is disposed of, the following would be true.

• A)The tax shelter would now be larger by $400
• B)The tax shelter implications would be the same as in Question 84
• C)The tax shelter from the asset disposition would be delayed until the pool is terminated
• D)The salvage would be a cost of leasing, minus the lost tax shelter

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