The Celluloid Collar Corporation has $210,000 in tax loss carry forwards. The Bowstring Shirt Company, a firm in the 30% tax bracket, would be willing to pay (on a non-discounted basis) the sum of ______________ for Celluloid Collar Corporation's carry forward alone.

Question

Quizplus · Accepted Answer

To calculate the value of the tax loss carry forwards for Celluloid Collar Corporation, we need to multiply the amount of the carry forwards ($210,000) by the tax rate of the acquiring firm (30%). This gives us a value of $63,000, which is the amount Bowstring Shirt Company would be willing to pay for Celluloid Collar Corporation's carry forward alone. Therefore, the answer is C.

The Celluloid Collar Corporation Has $210,000 in Tax Loss Carry