An Asset with a Book Value of $200,000 Is Sold

Multiple Choice

An asset with a book value of $200,000 is sold at a loss before taxes are considered) of $40,000.If the applicable tax rate is 40%, _____ is the tax effect of the loss.

A) $16,000 cash inflow
B) $16,000 cash outflow
C) $40,000 cash inflow
D) $216,000 cash inflow