You purchased a machine for $1.17 million three years ago and have been applying straight-line depreciation to zero for a seven-year life. Your tax rate is 25%. If you sell the machine today (after three years of depreciation) for $ 765,000, what is your incremental cash flow from selling the machine?

EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter10: Capital Budgeting: Decision Criteria And Real Option
Section: Chapter Questions
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You purchased a machine for $1.17 million three years ago and have been applying straight-line depreciation to zero
for a seven-year life. Your tax rate is 25%. If you sell the machine today (after three years of depreciation) for $
765,000, what is your incremental cash flow from selling the machine?
Transcribed Image Text:You purchased a machine for $1.17 million three years ago and have been applying straight-line depreciation to zero for a seven-year life. Your tax rate is 25%. If you sell the machine today (after three years of depreciation) for $ 765,000, what is your incremental cash flow from selling the machine?
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