Business Finance - Check/Help

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Smith Manufacturing is considering the sale of two non depreciable assets, A and B. Asset A was purchased for \$2000 and will be sold today for \$2250. Asset B was purchased for \$30,000 and will be sold today for \$35000. The firm is subject to a 40% tax rate on capital gains.

1. Calculate the amount of capital gain realized on each of the assets.

Answer: I got \$250 for A and \$3000 for B

2. Calculate the tax on the sale of each asset.

• Business Finance - Check/Help -

I can see the \$250 but not the \$3000? I see \$5,000? Now take 40% of each total for the tax on each one.

Sra

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