When current assets exceed current liabilities, a firm has negative net working capital. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
Northern Co. purchases an asset for $50,000. This asset qualifies as a five-year recovery asset under MACRS, with the fixed depreciation percentages as follows: year 1 = 20.00%; year 2 = 32.00%; year 3 = 19.20%; year 4 = 11.52%. Northern has a tax rate of 35%. If the asset is sold at the end […]
Date: September 19th, 2020
Southern Inc. purchases an asset for $150,000. This asset qualifies as a five-year recovery asset under MACRS with the fixed depreciation percentages as follows: year 1 = 20.00%; year 2 = 32.00%; year 3 = 19.20%; year 4 = 11.52%. Southern has a tax rate of 35%. If the asset is sold at the end […]
Date: September 19th, 2020
Fully depreciated assets ________ , and so any proceeds from sale at disposal are taxable gains. A) always have a market value of zero B) have a positive book value C) have a negative market value D) have a book value of zero ANSWER Answer: D
Date: September 19th, 2020
Under the Securities Exchange Act of 1934, Congress created the Securities and Exchange Commission (the ‘SEC’). The SEC’s mission is to administer federal securities laws and issue rules and regulations to provide protection for investors and to ensure that the securities markets are fair and honest. This is accomplished primarily by: a. creating a national […]
Date: September 19th, 2020
Net working capital can be defined as the portion of a firm’s current assets financed with long-term funds. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
The tax rules for depreciation recapture are much more ________ than a simplified approach for disposal. A) basic B) complicated C) easy D) shortened ANSWER Answer: B
Date: September 19th, 2020
The current book value of an asset serves as the basis for determining the gain or loss at disposal. Indicate whether the statement is true or false. ANSWER Answer: TRUE
Date: September 19th, 2020
Which is NOT a step in the estimation of after-tax cash flow at disposal? A) If selling price is greater than book value: Selling Price – Tax on Gain. B) If selling price is less than book value: Selling Price + Tax Credit on Loss. C) If book value is less than selling price: Selling […]
Date: September 19th, 2020
If the selling price of an asset at disposal is greater than its book value, then the after-tax cash flow is the selling price minus the tax on the gain. Indicate whether the statement is true or false. ANSWER Answer: TRUE
Date: September 19th, 2020
