What could be the solution to the attached? Suppose you sell a fixed asset for $75,000 when its book value is $80,000. If your company's marginal tax rate is 21 percent, what will be theeffect on cash flows of this sale (i.e., what wilIl be the after-tax cash flow of this sale)?Multiple Choice$75,000$5,000$76,050$48,750

Given, Sale value = $75,000 Book value = $80,000 Tax rate = 21%

Answered: u sell a fixed asset for $75,000 when…

u sell a fixed asset for $75,000 when its book value is $80,000. If your company's marginal t sh flows of this sale (i.e., what will be the after-tax cash flow of this sale)? e Choice

Entrepreneurial Finance

6th Edition

ISBN:9781337635653

Author:Leach

Publisher:Leach

Chapter4A: Nopat Breakeven: Revenues Needed To Cover Total Operating Costs

Section: Chapter Questions

Problem 1EP

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Concept explainers

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.

Question

What could be the solution to the attached?

Suppose you sell a fixed asset for $75,000 when its book value is $80,000. If your company's marginal tax rate is 21 percent, what will be the
effect on cash flows of this sale (i.e., what wilIl be the after-tax cash flow of this sale)?
Multiple Choice
$75,000
$5,000
$76,050
$48,750

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