The book value of an asset is primarily used to compute the: Multiple Choice annual

b. Amount of tax due on the sale of an asset

Explanation:

The book value of an asset is primarily used to compute the amount of tax due on the sale of an asset. The book value of an asset is value of asset on the company/ It is important to note that the book value is not a fair market value. Book value is an accounting and tax calculation. The salvage value of an asset is after-tax cash flow in an amount equal to sales price minus the tax due based on the sales price minus the book value.

Operating income will rise by $7,500

Explanation:

If the Fox, Inc. can complete the order and it wouldn´t affect them inthe regular sales, they would just have to calculate the price of making each pen, which is one dollar per pen, with absorption costs, and then withdraw that from the income they will make for the sale:

3,500 pens at 3 dollars=10,500

We withdraw the 3,500 from making them:

10,500-3,500= 7,000

So the income will increase by $7,000 is they take the order.