Consider an Asset That Costs $200,000 and Has a CCA

Multiple Choice

Consider an asset that costs $200,000 and has a CCA rate of 20% for tax purposes. The asset wasused for 5 years at which time it was sold for $150,000. If the relevant tax rate is 40%, what is theafter-tax cash flow from the sale of this asset? Assume the asset pool is closed upon sale of the asset.

A) $171,876
B) $144,167
C) $162,167
D) $119,491