Question
1.National Geographic is replacing an old printing press with a new one. The old press is being sold for $350,000 and it has a net
1.National Geographic is replacing an old printing press with a new one. The old press is being sold for $350,000 and it has a net book value of $75,000. Assume that National Geographic is in the 40% income tax bracket. How much will National Geographic net from the sale?
| $315,000 |
| $116,050 |
| $240,000 |
| $112,112 |
2. If a company decides that it needs to impose capital rationing, which statement is true?
| The effect is positive if adverse economic conditions exist. |
| The effect is negative because the process involves rejecting a project with a positive net present value, which in turn fails to maximize shareholders |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started