A Bakery Invests $30,000 in a Light Delivery Truck

question 51

Multiple Choice

A bakery invests $30,000 in a light delivery truck.This was depreciated using the five-year MACRS schedule shown above.If the company sold it immediately after the end of year 2 for $22,000,what would be the after-tax cash flow from the sale of this asset,given a tax rate of 40%?

• A)$5,184
• B)$8,544
• C)$8,640
• D)$16,656

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Definitions:

Homogeneous Oligopoly

A market structure featuring a small number of firms offering products or services that are largely identical or undifferentiated.

Virtually Identical

Items or situations that are almost the same or very closely resemble each other in most aspects.

Price

The amount of money required to purchase a good or service, often determined by the interplay of supply and demand.

Output

The quantity of goods or services produced by a business, industry, or economy within a certain period.