An asset with a book value of $160,000 is sold at a loss before taxes are considered) of $40,000.If the applicable tax rate is 20%, the net after-tax cash effect of this transaction is an) _____.

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The asset is sold at a loss of $40,000, reducing its value to $120,000 ($160,000 - $40,000). The tax benefit from the loss is $8,000 (20% of $40,000), which when added to the sale proceeds of $120,000, results in a net after-tax cash inflow of $128,000.

An Asset with a Book Value of $160,000 Is Sold