MotoSport is buying an asset that costs $730, 000 and can be depreciated at 20 percent per year (Class 8) over its eight -year life. The asset is to be used in a three-year project; at the end of the project, the asset can be sold for $740,200. The company faces a tax rate of 26%. The sale of this asset will close the asset class. The. from the sale of asset is Multiple Choice Capital gain; $10, 200 Capital gain; $319, 720 Terminal loss; $10, 200 Terminal loss; $ 319,720 Capital gain; $11,583

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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MotoSport is buying an asset that costs $730,000 and can be depreciated at 20 percent per year (Class 8) over its eight
-year life. The asset is to be used in a three-year project; at the end of the project, the asset can be sold for $740,200.
The company faces a tax rate of 26%. The sale of this asset will close the asset class. The from the sale of asset
is
Multiple Choice Capital gain; $10, 200 Capital gain; $319, 720 Terminal loss; $10, 200 Terminal loss; $
319, 720 Capital gain; $11,583
Transcribed Image Text:MotoSport is buying an asset that costs $730,000 and can be depreciated at 20 percent per year (Class 8) over its eight -year life. The asset is to be used in a three-year project; at the end of the project, the asset can be sold for $740,200. The company faces a tax rate of 26%. The sale of this asset will close the asset class. The from the sale of asset is Multiple Choice Capital gain; $10, 200 Capital gain; $319, 720 Terminal loss; $10, 200 Terminal loss; $ 319, 720 Capital gain; $11,583
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