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

question 108

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 percent, 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:

IR Absorption

The process where a molecule absorbs infrared radiation, leading to vibrational transitions, used in spectroscopy to identify chemical compounds.

Intense IR Absorption

Refers to the strong absorption of infrared light by a molecule, typically due to specific bond vibrations, useful in identifying functional groups.

C-H Stretch

Refers to the vibration observed in infrared spectroscopy representing the stretching of carbon-hydrogen bonds.

Conjugation

The overlapping of p-orbitals in adjacent atoms creating a system of connected π-electrons across the molecule, leading to stabilization and coloration in compounds.