Question

If an asset is sold for less than its depreciation book value, it is taxed at the capital gain tax rate taxed at ordinary inc

0 0
Add a comment Improve this question Transcribed image text
Answer #1

1. If an Asset is Sold for a price less than its book value it will result into loss. Therefore no tax will be payable. As a result of loss tax savings will arise.

Answer C

Add a comment
Know the answer?
Add Answer to:
If an asset is sold for less than its depreciation book value, it is taxed at...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
  • please answer all O Answer all questions .30 points Circle the letter for the correct answer...

    please answer all O Answer all questions .30 points Circle the letter for the correct answer If an asset is sold for less than is depreciation book value, it is taxed at the capital gain tax rate taxed at ordinary income tax rate. subject to tax savings due to capital loss d. not subject to any income tax consideration Changes in the firm's cash flows that are a dirst consequence of accepting a project are erosion cash flows e Net...

  • With the improvement in the technology and understanding of discounting techniques, both the net present value...

    With the improvement in the technology and understanding of discounting techniques, both the net present value (NPV) technique and internal rate of return (IRR) technique used in capital budgeting analyses have become more popular because these techniques provide decisions that help the firm to a. minimize its overall payback period b.maximize its value c. maximize the initial capital investment d. minimize the number of multiple IRRs computed for every project e.maximize it required rate of return QUESTION 10 Which of...

  • 1. We can get multiple IRRS when we draw an NPV profile for a project when:...

    1. We can get multiple IRRS when we draw an NPV profile for a project when: a. The project is riskless. b. The project requires a large investment. c. The project cash flows are uneven and change in sign. d. The project has a balloon payment. e. The opportunity cost of capital is high. 2. The length of time required for an investment to generate cash flows sufficient to recover its initial cost, without taking into account time value of...

  • Help and verified and be clear. The net present value (NPV) and internal rate of return...

    Help and verified and be clear. The net present value (NPV) and internal rate of return (IRR) methods of investment analysis are interrelated and are sometimes used together to make capital budgeting decisions. Consider the case of Blue Hamster Manufacturing Inc.: Last Tuesday, Blue Hamster Manufacturing Inc. lost a portion of its planning and financial data when both its main and its backup servers crashed. The company's CFO remembers that the internal rate of return (IRR) of Project Lambda is...

  • СР, 0 A project's internal rate of return (IRR) is the -Select- that forces the PV...

    СР, 0 A project's internal rate of return (IRR) is the -Select- that forces the PV of its inflows to equal its cost. The IRR is an estimate of the project's rat of return, and it is comparable to the - Select on a bond. The equation for calculating the IRR is: NPV = CF. + CF + СР + ... + =0 (1 + IRR) (1 + ru (1 + R) CF (1 + IRR) CFt is the expected...

  • 7) Which of the following statements is FALSE? A) The IRR investment rule will identify the...

    7) Which of the following statements is FALSE? A) The IRR investment rule will identify the correct decision in many, but not all, situations. B) By setting the NPV equal to zero and solving for r, we find the IRR. C) If you are unsure of your cost of capital estimate, it is important to determine how sensitive your analysis is to errors in this estimate. D) The simplest investment rule is the NPV investment rule. 8) Which of the...

  • F a company is in the situation of having unlimited capital funds, the best decision rule, consid...

    f a company is in the situation of having unlimited capital funds, the best decision rule, considering only financial factors, is for the company to invest in all projects in which: The payback period is short. The accounting (book) rate of return (ARR) is greater than its current return on invested capital (ROI). The net present value (NPV) is greater than the cost of capital. The internal rate of return (IRR) is greater than zero. The NPV is greater than...

  • A company is considering a three-year project. New equipment will cost $200,000. The equipment falls in...

    A company is considering a three-year project. New equipment will cost $200,000. The equipment falls in the MACRS three-year class (.3333, .4445, .1481, .0741) it will have a salvage value at the end of the project of $50,000. The project is expected to produce sales of $100,000 in the first year and sales will increase by $50,000 each year after that. Expense are expected to be 40% of sales. An investment in net-working capital of $5,000 is required at the...

  • Part Two Net Present Value Method Net present value (NPV) is one method that can be...

    Part Two Net Present Value Method Net present value (NPV) is one method that can be used to evaluate the fihancial viability of potential projects. It determines the present value of all future cash flows associated with potential projects and measures this against the cost of the project. To use net present value, a required rate of return must be defined. The required rate of return is the minimum acceptable rate of return that an investment must yield for it...

  • Only say choice 8. In order to maximize firm value, management should invest in new assets...

    Only say choice 8. In order to maximize firm value, management should invest in new assets when the internal rate of retum a. greater or equal to the firm's marginal cost of capital. b. greater than the cost of debt financing. c. less than or equal to the accounting rate of return. 9. The cost of capital is: a. the opportunity cost of using funds to invest in new projects. b. the rate of return the firm must ean on...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT