Q8.

Pertinent information for two alternatives A and B is shown below. If i=10%/year and the effective income tax rate is 35%, answer the following true/false questions.

Alt. A	Alt.B
Basis, $	150,000	225,,000
Gross Income (GI), $	100,000	100,000
Operating Expense (OE), $	30,000	10,000
Salvage Value, $	15,000	22,500
MARCS Depreciation Method	ADS-6: Years Recovery Period	GDS: 5-Years Recovery Period

The CFAT at the end of year 7 for Alt. A is less than $50,000.

Group of answer choices

True

False