Discussion
Had that same defender's book value been 28 000 rather than 55 000, the net proceeds of sale would have been
Answer: B
A book value below the market value turns the disposal into a taxable gain of 12 000, costing 3600, instead of a deductible loss worth 4500. The same asset at the same price therefore yields 8100 less in cash purely because of its depreciation history.
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