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 Price + Tax Credit on Loss.
D) If selling price equals book value: Selling Price.
Answer: C
Explanation: C) In general, we have the following steps in the estimation of after-tax cash flow at disposal:
(1) If selling price is greater than book value: Selling Price - Tax on Gain.
(2) If SELLING PRICE is less than BOOK VALUE: Selling Price + Tax Credit on Loss.
(3) If selling price equals book value: Selling Price.
NOTE: If book value is less than selling price: SELLING PRICE - TAX ON GAIN.
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A check is a type of draft.
a. true b. false
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