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.

Question

Quizplus · Accepted Answer

C) is incorrect because it misstates the tax treatment when the book value is less than the selling price. In such a case, there would be a tax on the gain, not a tax credit on loss.

Which Is NOT a Step in the Estimation of After-Tax