Suppose a Firm Has an Asset That Originally Cost $5000

question 14

Multiple Choice

Suppose a firm has an asset that originally cost $5000 and currently has accumulated depreciation of $2000. The firm is subject to a 28 per cent income tax rate. Suppose the firm sells the asset for $2000. What was the book value before sale?

• A) $5000
• B) $2000
• C) $3000
• D) $1500

---

Definitions:

Yellow Bone Marrow

A type of bone marrow composed mainly of fat cells, found in the central cavities of long bones.

Red Bone Marrow

The type of bone marrow that produces blood cells, including red blood cells, white blood cells, and platelets.

Proximal Epiphyses

The end parts of a long bone that are closest to the body's center, involved in growth and development.

Red Bone Marrow

A tissue found within bones that produces new blood cells, including red blood cells, white blood cells, and platelets.