Given an asset with a net book value (NBV) of $47,000. a. What are the after-tax proceeds for a firm in the 31% tax bracket if this asset is sold for $59,000 cash? b. What are the after-tax proceeds for a firm in the 31% tax bracket if this asset is sold for $28,000 cash? b. After-Tax Proceeds

Given an asset with a net book value (NBV) of $47,000. a. What are the after-tax proceeds for a firm in the 31% tax bracket if this asset is sold for $59,000 cash? b. What are the after-tax proceeds for a firm in the 31% tax bracket if this asset is sold for $28,000 cash? b. After-Tax Proceeds

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter2: The Domestic And International Financial Marketplace

Section2.A: Taxes

Problem 4P

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Concept explainers

Fringe Benefit Tax

Fringe benefits are in addition to the compensation that companies give to their employees. It is an additional benefit above the stated salary. It helps to keep the employees of the firm motivated as sometimes the only salary is not enough to retain the quality employees of the firm. There are different types of fringe benefits. Fringe benefits are given in both private as well as public enterprises.

Question

am. 111.

Given an asset with a net book value (NBV) of $47,000.
a. What are the after-tax proceeds for a firm in the 31% tax bracket if this asset is sold for $59,000 cash?
b. What are the after-tax proceeds for a firm in the 31% tax bracket if this asset is sold for $28,000 cash?
b.
After-Tax
Proceeds

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Step 1: Introducing Gain or Loss on Sale of Assets

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Step 2: Calculate the After Tax Proceed for Situation A

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Step 3: Calculate the After Tax Proceed for Situation B

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