Table 11.3
Fine Press is considering replacing the existing press with a more efficient press. The new press costs $55,000 and requires $5,000 in installation costs. The old press was purchased 2 years ago for an installed cost of $35,000 and can be sold for $20,000 net of any removal costs today. Both presses are depreciated under the MACRS 5-year recovery schedule. The firm is in 40 percent marginal tax rate.
-Calculate the tax effect from the sale of the existing asset. (See Table 11.3)
Definitions:
Process Information
The method by which individuals perceive, analyze, and interpret information from their environment to make decisions or solve problems.
Behaviorism
A theory in psychology that focuses on observable behaviors and disregards mental processes.
Psychoanalysis
Freud’s theory of personality that attributes thoughts and actions to unconscious motives and conflicts. Freud’s therapeutic technique used in treating psychological disorders. Freud believed the patient’s free associations, resistances, dreams, and transferences—and the analyst’s interpretations of them—released previously repressed feelings, allowing the patient to gain self-insight.
Humanistic Psychology
A historically significant perspective that emphasized human growth potential.
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