At the End of a Five-Year Life,a Company Will Dispose

question 103

Multiple Choice

At the end of a five-year life,a company will dispose of an asset and recognize a gain of $6,000.If the company's cost of capital is 15 percent and its tax rate is 30 percent,what is the present value of the future cash flow?

• A)$14,078.
• B)$6,000.
• C)$2,087.
• D)$895.

Identify the factors influencing the burden distribution of taxes between buyers and sellers.

Recognize the role of government in tax imposition and its impact on market outcomes.

Explain the concept of payroll taxes and how they are shared between employers and employees.

Understand the impact of price controls and taxes on market shortages and surpluses.

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Definitions:

Fixed Number

A fixed number usually refers to a constant quantity or value that does not change in a given context, such as a fixed number of repetitions in an experiment.

Fixed-ratio Schedule

A schedule of reinforcement where a response is reinforced only after a specified number of responses have been made.

Reinforcement

In behavioral psychology, a process in which a behavior is strengthened or made more likely to occur again by rewarding it or providing a positive stimulus.

Fixed Number

A quantity that remains constant and does not change or vary in a given context.