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Corporate Finance

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Capital Gains Tax

CORPFN-OXRMEA

You are thinking about replacing your old pizza oven with a new one. The old oven cost \$100,000 eight years ago, and you have been depreciating it on a straight line basis over 10 years. A liquidator has offered you \$15,000 for the old oven. Your marginal tax rate is 35%.

What amount of capital gains tax do you owe?

A

$5,250

B

$1,750

C

None

D

$5,000