Assume an asset cost $72,800 and has a current book value of $42,760. The asset is sold today for $32,900 cash. The firm's tax rate is 21 percent. As a result of this sale, the firm's net cash flow: 1. will increase by more than $32,900. 2. will increase by less than $32,900. 3. will increase by exactly $32,900 4. will decrease by the difference between the $42,760 and the $32,900.

As a result of this sale, the firm's net cash flow will increase by more than $32,900. The right option is 1.

Explanation:

According to the given we have the following:

asset cost= $72,800

current book value=$42,760

sale=$32,900

Therefore, loss=current book value-sale

loss=$42,760-$32,900

loss=$9,860

tax saving on loss=$9,860*21%=$2,070.60

Therefore, net cash flow=$32,900+$2,070.60

net cash flow=$34,970.60

As a result of this sale, the firm's net cash flow will increase by more than $32,900

whole quiz

1. the sum of all activities involved in getting high-quality products into the marketplace

2.operations

3. the principle of looking at the supply chain as a whole in order to improve the overall flow through the system.

4. produced; performed

5. activities producing tangible products, such as radios, newspapers, buses, and textbooks.

6. activities producing intangible and tangible products, such as entertainment, transportation, and education.

7.   customer focus

8. analyzing a competitor's products to identify desirable improvements

9. the systematic direction and control of the processes that transform resources into finished projects that create value for and provide benefits to consumers.

10. operation management.

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