Suppose You Sell a Fixed Asset for $10,000 When Its

question 55

Multiple Choice

Suppose you sell a fixed asset for $10,000 when its book value is $2,000. If your company's marginal tax rate is 35 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)$2,800
• B)$7,200
• C)$5,200
• D)$6,500

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