The Current Book Value of a Fixed Asset That Was

question 57

Multiple Choice

The current book value of a fixed asset that was purchased two years ago is used in the computation of which one of the following?

• A)depreciation tax shield
• B)tax due on the salvage value of that asset
• C)current year's operating cash flow
• D)change in net working capital
• E)MACRS depreciation for the current year

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Definitions:

Indemnity

A legal principle involving security or protection against financial liability or loss.

False Statements

Deliberately untrue assertions made by someone, which can sometimes be a legal offence if made in certain contexts.

Incontestability Clause

A provision in an insurance policy that makes the policy non-contestable after it has been in force for a certain period, usually two years, except under certain conditions.

Arbitration Clause

A provision in a contract that requires disputes to be resolved through arbitration rather than court litigation.