Suppose you sell a fixed asset for $180,000 when its book value is $200,000. If your company's marginal tax rate is 30%, what will be the effect on the cash flows of this sale (i.e., what will be the after-tax cash flow of this sale)? A) $186,000 B) $150,000 C) $170,000 D) $140,000

Suppose you sell a fixed asset for $180,000 when its book value is $200,000. If your company's marginal tax rate is 30%, what will be the effect on the cash flows of this sale (i.e., what will be the after-tax cash flow of this sale)? A) $186,000 B) $150,000 C) $170,000 D) $140,000

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter6: Accounting For Financial Management

Section: Chapter Questions

Problem 11P: The Berndt Corporation expects to have sales of 12 million. Costs other than depreciation are...

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Question

Financial Accounting

Suppose you sell a fixed asset for $180,000 when its book value is
$200,000. If your company's marginal tax rate is 30%, what will be
the effect on the cash flows of this sale (i.e., what will be the after-tax
cash flow of this sale)?
A) $186,000
B) $150,000
C) $170,000
D) $140,000

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