Suppose you sell a fixed asset for $90,000 when its book value is $95,000. If your company's marginal tax rate is 40%, what will be the effect on cash flows of this sale (i.e., what will be the after-tax cash flow of this sale) ?
A) $3,000
B) $5,000
C) $92,000
D) $95,000
Correct Answer:
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