Suppose you sell a fixed asset for $125,000 when its book value is $139,000. If your company's marginal tax rate is 30%, what will be the effect on cash flows of this sale (i.e., what will be the after-tax cash flow of this sale)? Group of answer choices a. $120,080 b. $129,200 c. $9,800 d. $14,000

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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Suppose you sell a fixed asset for $125,000 when its book value is $139,000. If your company's marginal tax rate is 30%, what will be the effect on cash flows of this sale (i.e., what will be the after-tax cash flow of this sale)?
Group of answer choices
a. $120,080
b. $129,200
c. $9,800
d. $14,000
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