Cash-Flow Analysis: If an Existing Asset Is Sold at a Gain

question 72

Multiple Choice

Cash-flow analysis: If an existing asset is sold at a gain, and the gain is taxable, then the after-tax proceeds from this transaction would be equal to:

• A) Net proceeds from the sale plus the after-tax gain on the sale.
• B) Net proceeds from the sale less the after-tax gain on the sale.
• C) Net proceeds from the sale plus the taxes paid on the gain.
• D) Net proceeds from the sale less the taxes paid on the gain.
• E) The pre-tax proceeds plus taxes on the gain.

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Definitions:

Negatively Skewed

Describes a distribution of numerical data where the left tail is longer or fatter than the right, showing that the majority of values are concentrated on the right side of the distribution.

Positively Skewed

A type of distribution in which the right tail is longer, illustrating that a dataset has a large number of higher value outliers.

Histogram

A graphical representation of the distribution of numerical data, showing the frequency of data within specified intervals.

Symmetric

A characteristic of datasets or distributions where the shape to the left and right of the center is mirror-like or evenly balanced.