An asset with initial cost base of 6 million was bought 5 years ago. At the end of the current year (fifth year) the asset is sold by 1.1 million. The asset belongs to the 7 years MACRS property class. Knowing that the gains(loss) tax rate is 40%, what is the net proceeds resulted from selling this asset?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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QUESTION 4
An asset with initial cost base of 6 million was bought 5 years ago. At the end of the current year (fifth year) the asset is sold by 1.1
million. The asset belongs to the 7 years MACRS property class. Knowing that the gains(loss) tax rate is 40%, what is the net proceeds
resulted from selling this asset?
$897,400
2,044,012
978,700
2,371,600
Transcribed Image Text:QUESTION 4 An asset with initial cost base of 6 million was bought 5 years ago. At the end of the current year (fifth year) the asset is sold by 1.1 million. The asset belongs to the 7 years MACRS property class. Knowing that the gains(loss) tax rate is 40%, what is the net proceeds resulted from selling this asset? $897,400 2,044,012 978,700 2,371,600
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