Calculate the tax consequences for the following assets sales. The assets all belong to a CCA class with a 20% rate and the company has a cost of capital of 10% and a marginal tax rate of 30%. Unless told otherwise assume there are still assets in the class after the sale. a. An asset with an original cost of $10,000 is sold for $6,000. The UCC balance before the sale is $12,000.
Calculate the tax consequences for the following assets sales. The assets all belong to a CCA class with a 20% rate and the company has a cost of capital of 10% and a marginal tax rate of 30%. Unless told otherwise assume there are still assets in the class after the sale. a. An asset with an original cost of $10,000 is sold for $6,000. The UCC balance before the sale is $12,000.
Chapter9: Capital Budgeting And Cash Flow Analysis
Section: Chapter Questions
Problem 1P
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Transcribed Image Text:4. Calculate the tax consequences for the following assets sales. The assets all belong to a CCA
dass with a 20% rate and the company has a cost of capital of 10% and a marginal tax rate of
30%. Uniess told otherwise assume there are still assets in the class after the sale.
a. An asset with an original cost of $10,000 is sold for $6,000. The UCC balance before the
sale is $12,000.
b. Answer part a assuming the UCC balance before the sale was $4,000
C. An asset with an original cost of $6,000 is sold for $5,000. This is the last asset in the
class and the UCC balance before the sale was 11,000.
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