In 2017, a firm\'s manager completed the present-worth tax calculations for an a
ID: 1164263 • Letter: I
Question
In 2017, a firm's manager completed the present-worth tax calculations for an asset that had reached the end of its useful life. For this purpose the manager
a) multiplied the value of the asset by the CSF
b) multiplied the value of the asset by (1-t), where t is the tax rate.
c) multiplied the value of the asset by the CTF
d) multiplied the value of the asset by (1-d), where d is the depreciation rate.
e) multiplied the value of the asset by d, where d is the depreciation rate.
a) multiplied the value of the asset by the CSF
b) multiplied the value of the asset by (1-t), where t is the tax rate.
c) multiplied the value of the asset by the CTF
d) multiplied the value of the asset by (1-d), where d is the depreciation rate.
e) multiplied the value of the asset by d, where d is the depreciation rate.
Explanation / Answer
The correct answer is B. The tax component must be included. The correct answer thus is B.