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

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 16EA: Project B cost $5,000 and will generate after-tax net cash inflows of $500 in year one, $1,200 in...

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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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