An Asset with a Book Value of $200,000 Is Sold

question 130

Multiple Choice

An asset with a book value of $200,000 is sold for $160,000.The applicable tax rate is 40%.What is the tax effect of the loss?

• A)$16,000 cash outflow
• B)$16,000 cash inflow
• C)$40,000 cash inflow
• D)$176,000 cash inflow

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