If the salvage value, at the time of an asset disposition, is less than the book value of the asset, then the company will effectively receive a positive cash flow from taxes on the sale.

Question

Quizplus · Accepted Answer

This statement is true. If the salvage value of an asset is less than its book value at the time of disposition, the company can claim a loss on its taxes, which will effectively reduce its tax liability and result in a positive cash flow.

If the Salvage Value, at the Time of an Asset