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IMANET Exam CMA Topic 5 Question 97 Discussion
Actual exam question for
IMANET's
CMA exam
Question #: 97
Topic #: 5
[All CMA Questions]
Topic #: 5
The Stewart Co. uses the economic order quantity (EOQ) model for inventory management.A decrease in which one of the following variables would increase the EOQ?
Suggested Answer:
D
A firm enjoys a tax benefit upon recognizing a loss on disposal because the loss reduces book income. The old equipments book value is historical cost ($220,000) minus accumulated depreciation ($208,000).
The tax benefit is the accrual-basis loss on the disposal times the effective tax rate.
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