Question: Question # 3 Suppose that a cafe owner is downsizing and selling some of the kitchen equipment to generate a cash flow. He sells an

Question # 3

Suppose that a cafe owner is downsizing and selling some of the kitchen equipment to generate a cash flow. He sells an older oven that is rarely used due to slowing business. The book value of the oven is currently $900, and he sells it for $1,100. At a tax rate of 21%, what will the taxes be on the cash flow generated from the sale of the oven?

a. -$189
b. -$42
c. $ 0
d. $42
e. $231

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