CASE
1

•Book Value of an asset = 90 K

•Potential Selling price =
93

•Purchase price of
asset replacement= 94
IF YOU SELL, you will have a capital gain of +3 in the P&L and a negative cash flow of -1. Should you sell the existing asset and buy a new one?

Question

CASE
1

•Book Value of an asset  = 90 K

•Potential Selling price =
93

•Purchase price of
asset replacement= 94 
  IF YOU SELL, you will have a capital gain of +3 in the P&L and a negative cash flow of -1. Should you sell the existing asset and buy a new one?

Accepted Answer

no even though your P&L impact is positive (capital gain of +3) you do not want to trigger a negative  cash impact (-1)

Answer

yes because your P&L impact is positive (capital gain of +3) even though your net cash impact is negative (-1)

Crowdly

CASE 1 •Book Value of an asset = 90 K •Potential Selling price = 93 •...

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