Suppose you sell a fixed asset for $118,000 when its book value is $138,000. If your company's marginal tax rate is 39 percent, what will be the effect on the cash flows of this sale?

Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter22: Providing And Obtaining Credit
Section: Chapter Questions
Problem 14MC
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Suppose you sell a fixed asset...accounting questions

Suppose you sell a fixed asset for $118,000
when its book value is $138,000. If your
company's marginal tax rate is 39 percent,
what will be the effect on the cash flows of
this sale?
Transcribed Image Text:Suppose you sell a fixed asset for $118,000 when its book value is $138,000. If your company's marginal tax rate is 39 percent, what will be the effect on the cash flows of this sale?
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