A loss on the disposal of a replacement asset is an irrelevant fact when estimating relevant cash flows of a capital asset decision.

Name: A loss on the disposal of a replacement asset is an irrelevant fact when estimating relevant cash flows of a capital asset decision.
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Question

Quizplus · Accepted Answer

A loss would result in tax savings equal to the loss x the firm's income tax rate which would be a relevant tax savings (cash inflow) as a result of the capital asset investment decision

A Loss on the Disposal of a Replacement Asset Is