CASE
1

•Book Value of an asset = 90 K

•Potential Selling price =
40

Purchase price of
asset replacement= 37
IF YOU SELL, you will have a capital loss of -50 in the P&L and a positive cash flow of +3. Should you sell the existing asset and buy a new one?

Question

CASE
1

•Book Value of an asset  = 90 K

•Potential Selling price =
40

Purchase price of
asset replacement= 37 
  IF YOU SELL, you will have a capital loss of -50 in the P&L and a positive cash flow of +3. Should you sell the existing asset and buy a new one?

Accepted Answer

yes because your net cash is positive + 3 even though you have to book an accounting loss of -50

Answer

no even though your net cash is positive (+3) you do not want to show a capital loss of -50 in the P&L

Crowdly

CASE 1 •Book Value of an asset = 90 K •Potential Selling price = 40 Pu...

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