A Plant Asset with a Book Value of $200,000 Is

Multiple Choice

A plant asset with a book value of $200,000 is sold for $150,000.The applicable tax rate is 40%.What is the tax effect of the loss on sale?

A) $20,000 cash outflow
B) $20,000 cash inflow
C) $30,000 cash inflow
D) $170,000 cash inflow