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At the end of a projects life, an asset wil be disposed. The projects cash flow statement will show a small gains tax credit (positive cash flow). Which of these statments must be true?

A) the asset will be sold for less than its book value

B) the asset will be sold for more than its book value but less than its orginal cost

C) the asset will be sold for more than its original cost.

D) there is not enough information to answer this question

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Related questions

suppose the asset bought for $100,000 has been sold for $100000 after two years. which of the following statement is most accurate?

I- there is capital gain

II- there is capital loss

III- there is depreciation recapture

2- Suppose the asset has been sold for $110,000 after two years. Initial purchase price of $100,000, a gross income of $40,000, a current book value of $60,000, a depreciation amount of $10,000, and tax rate of 50%. What is the taxable income?

3- A truck was purchased 3 years ago for $45,000 and can be sold today for $24,000. The operating costs are $9,000 per year, and it is expected to last 4 more years with a $5,000 salvage value. A new truck, which will perform that same service, can be purchased for $50,000, and it will have a life of 10 years with operating costs of $28,000 per year and a $10,000 salvage value. What is the value that should be used as P for the presently owned vehicle in a replacement study?

4- an asset was acquired by Hugo and Sons for a first cost of $100000 via a 10% per year loan that needs to be paid back using equal uniform amounts at the end of each year in 2 years. The amount of interest paid for the first year on this loan is?

5- an asset was acquired by Hugo and Sons for a first cost of $100000 via a 10% per year loan that needs to be paid back using equal uniform amounts at the end of each year in 2 years. In the first year, the company claimed $60,000 depreciation. If the gross income is $200,000 and operating expenses are $50,000, then the taxable income is?

The following are all True and False Questions:

1. Book Value represents the remaining underpreciated investment on the books after the depreciation charges to date have been subtracted

2. For the same interest rate, compounding interest does not always yield a larger future worth value than a simple interest rate

3. For any project, if its present worth is negative, the project will be rejected

4. The capatalized cost of a finite-life alternative can be obtained by calculating its annual worth over one life cycle and then multiplying by the interest rate

5. The depreciation amount is not directly included in CFBT (Cash Flow Before Tax), but depreciation is directly invlolved in the taxable calculation

6. Using incremental analysis of alternatives, the alternatice with the highest B/C ratio is selected.

7. Plotting PW vs i can be used to determine the IRR for a given project.

8. In conducting an incremental analysis, at any round, two alternatives can be compared and the alternative with the highest internal rate of return can be selected for comparison in the next round.


94. Unlike a hedge fund, a mutual fund:
a. is subject to very little government regulation and oversight.
b. can trade in derivative instruments.
c. caters to small individual savers.
d. All of the above.
e. None of the above.
98. Among the sources of AIGs problems were:
a. its heavy involvement in credit default swaps.
b. its heavy involvement in lending securities.
c. the downgrading of their credit rating.
d. All of the above.
e. Only A and B of the above.

99. Which of the following is true?
a. The required reserve ratio is the sum of the excess reserve ratio and the current ratio.
b. The required reserve ratio is the product of the excess reserve ratio and the current ratio.
c. The desired excess reserve ratio must be less than 15%.
d. The currency ratio must be less than 100%.
e. If people decide to hold less cash, then reserves in the banking sector will rise.

100. The money supply will fall if the:
a. required reserve ratio rises.
b. desired excess reserve ratio rises.
c. currency ratio rises.
d. All of the above.
e. Only A and B of the above.
106. In the model of money creation, if bank reserves rise by $1,000 then it must be true that currency held by the public:
a. also rises by $1000.
b. rises by more than $1000.
c. rises, but by less than $1000.
d. does not change.
e. falls by $1000.

107. The model of money creation presumes that when a bank holds positive undesired excess reserves that it will:
a. lend them out to the public.
b. use them to buy U.S. Treasury bills.
c. use them to increase their equity.
d. hold onto them for precautionary reasons.
e. return them to the Federal Reserve for an equal amount of gold.

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