This topic contains a solution. Click here to go to the answer

Author Question: A corporation is selling an existing asset for 1,700. The asset, when purchased, cost 10,000, was ... (Read 97 times)

bclement10

  • Hero Member
  • *****
  • Posts: 560
A corporation is selling an existing asset for 1,700. The asset, when purchased, cost 10,000, was being depreciated under MACRS using a five-year recovery period, and has been depreciated for four full years.
 
  If the assumed tax rate is 40 percent on ordinary income and capital gains, the tax effect of this transaction is ________.
  A) 0 tax liability
  B) 840 tax liability
  C) 3,160 tax liability
  D) 3,160 tax benefit

Question 2

Assuming the firm plans to pay out all of its earnings as dividends, the weighted average cost of capital is ________. (See Table 9.2 )
 
  A) 10.44 percent
  B) 10.9 percent
  C) 11.6 percent
  D) 12.1 percent



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

xMRAZ

  • Sr. Member
  • ****
  • Posts: 363
Answer to Question 1

A

Answer to Question 2

A




bclement10

  • Member
  • Posts: 560
Reply 2 on: Jul 11, 2018
YES! Correct, THANKS for helping me on my review


zacnyjessica

  • Member
  • Posts: 345
Reply 3 on: Yesterday
Gracias!

 

Did you know?

Urine turns bright yellow if larger than normal amounts of certain substances are consumed; one of these substances is asparagus.

Did you know?

Common abbreviations that cause medication errors include U (unit), mg (milligram), QD (every day), SC (subcutaneous), TIW (three times per week), D/C (discharge or discontinue), HS (at bedtime or "hours of sleep"), cc (cubic centimeters), and AU (each ear).

Did you know?

According to research, pregnant women tend to eat more if carrying a baby boy. Male fetuses may secrete a chemical that stimulates their mothers to step up her energy intake.

Did you know?

Every 10 seconds, a person in the United States goes to the emergency room complaining of head pain. About 1.2 million visits are for acute migraine attacks.

Did you know?

Although not all of the following muscle groups are commonly used, intramuscular injections may be given into the abdominals, biceps, calves, deltoids, gluteals, laterals, pectorals, quadriceps, trapezoids, and triceps.

For a complete list of videos, visit our video library