Which of the Following Asset Categories Would Include the Cost

question 30

Multiple Choice

Which of the following asset categories would include the cost of clearing land and removing unwanted buildings?

• A)Machinery and equipment
• B)Buildings
• C)Land
• D)Land improvements

---

Definitions:

After-tax Proceeds

The net amount received after taxes are deducted from the gross proceeds of a sale or transaction.

Tax Shield

A deduction allowed by the tax laws that lowers a person's or corporation's taxable income and thus their tax liability.

Incremental Cash Flow

Those cash flows that arise solely from the asset that is being evaluated.

Present Value

The current valuation of upcoming cash flows or a lump sum of money, discounted at an established rate of return.