=+b. Sale of second-hand machine:

purchase cost €1.5m (machine bought the previous year);

linear depreciation over five years (residual value is nil);

net book value today €1.2m;

potential sale price €1.0m.

If the tax rate on profits and capital gains/losses is 40%, what is the “value” for the company of the new machine the company is planning to buy (this company’s required rate of return is 12%)?