Suppose You Sell a Fixed Asset for $75,000 When Its

question 78

Multiple Choice

Suppose you sell a fixed asset for $75,000 when its book value is $80,000. If your company's marginal tax rate is 35 percent, what will be the effect on cash flows of this sale (i.e., what will be the after-tax cash flow of this sale) ?

• A)$5,000
• B)$48,750
• C)$76,750
• D)$80,000

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