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A firm has just purchased a new piece of equipment for $50,000. The equipment will cost an additional $2,000 to be delivered and installed. Based
A firm has just purchased a new piece of equipment for $50,000. The equipment will cost an additional $2,000 to be delivered and installed. Based on IRS guidelines, the equipment will be depreciated using a 3-year MACRS schedule. The firm plans on using the equipment for three years and then selling the equipment for $15,000. The tax rate facing the firm is 30%. What will be the cash flow from selling the equipment in three years?
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