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1)Use this MACRS depreciation schedule: Year0123 Depreciation rate (%)33.3344.4514.817.41 An equipment is purchased for $1,000,000 and is used through end of Year 2.At the end
1)Use this MACRS depreciation schedule:
Year0123
Depreciation rate (%)33.3344.4514.817.41
An equipment is purchased for $1,000,000 and is used through end of Year 2.At the end of Year 2, the equipment is sold for $100,000.What is the after tax cash flow from the sale of the equipment if the marginal tax rate is 40%?
a)$ 25,900b) $89,640c)$74,100d) $10,360
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