Compute the tax loss on the sale and the related tax benefit

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Question: An asset was purchased three years ago for $100,000. It falls into the five-year category for MACRS depreciation. The firm is in a 30 percent tax bracket. Use Table 12-12.

a. Compute the tax loss on the sale and the related tax benefit if the asset is sold now for $13,060. (Input all amounts as positive values. Do not round intermediate calculations and round your answers to whole dollars.)

b. Compute the gain and related tax on the sale if the asset is sold now for $52,060. (Input all amounts as positive values. Do not round intermediate calculations and round your answers to whole dollars.) HintsReferenceseBook & Resources WorksheetDifficulty: AdvancedLearning Objective: 12-02 Cash flow rather than earnings is used in the capital budgeting decision. Check my work ©2017 McGraw-Hill Education. All rights reserved.

Reference no: EM131935689

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