Bing Services Is Now in the Final Year of a Project.The

question 21

Multiple Choice

Bing Services is now in the final year of a project.The equipment originally cost $20,000.The existing UCC is $5,000.Bing can sell the used equipment today for $6,000,and its tax rate is 40%.What is the equipment's net after-tax salvage value for use in a capital budgeting analysis? Note that the recapture is fully taxable.

• A)$5,320
• B)$5,600
• C)$5,880
• D)$6,174

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Definitions:

Poor Information

Refers to scenarios where the data available for decision making is inadequate, inaccurate, or misleading.

Overall Set

The complete or total collection of elements, items, or objects under consideration.

Anchoring

The tendency people have to unconsciously base, or “anchor,” the valuation of an item they are currently thinking about on recently considered but logically irrelevant information.

Irrelevant Information

Information that has no bearing on the decisions being made, providing no value to the decision-making process.