Suppose You Sell a Fixed Asset for $90,000 When Its

question 58

Multiple Choice

Suppose you sell a fixed asset for $90,000 when its book value is $95,000. If your company's marginal tax rate is 40%, what will be the effect on cash flows of this sale (i.e., what will be the after-tax cash flow of this sale) ?

• A) $3,000
• B) $5,000
• C) $92,000
• D) $95,000

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Definitions:

Distraction/Conflict Theory

A theory suggesting that the presence of distractions or conflicting stimuli during a task can lead to decreased performance due to divided attention.

Cognitive Factors

Mental processes that influence understanding, decision making, and behaviour.

Simple Tasks

Activities or duties that are straightforward and uncomplicated, requiring minimal skill or effort to complete.

Zajonc

Zajonc is known for his work on social facilitation and the mere exposure effect, illustrating how presence of others affects individual performance and how repeated exposure increases liking.