Suppose You Sell a Fixed Asset for $75,000 When Its

question 37

Multiple Choice

Suppose you sell a fixed asset for $75,000 when its book value is $80,000. If your company's marginal tax rate is 35%, 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) $5,000
• B) $48,750
• C) $76,750
• D) $80,000

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Definitions:

Oval Window

A membrane-covered opening that leads from the middle ear to the inner ear, transmitting vibrations from the eardrum to the cochlea.

Cochlea

A spiral-shaped, fluid-filled inner ear structure that is essential for hearing; it translates sound vibrations into nerve impulses.

Blind Spot

A location in the visual field that corresponds to the lack of light-detecting photoreceptor cells on the optic disc of the retina, leading to a gap in the field of vision.

Reflected Light

Light that bounces off an object's surface, which can be perceived and analyzed to determine the object's properties.