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Blossom Potions, Inc., a pharmaceutical company, bought a machine at a cost of $2 million five years ago that produces pain-reliever medicine. The machine has
Blossom Potions, Inc., a pharmaceutical company, bought a machine at a cost of $2 million five years ago that produces pain-reliever medicine. The machine has been depreciated over the past five years, and the current book value is $828,000. The company decides to sell the machine now at its market price of $1 million. The marginal tax rate is 30 percent.
What are the relevant cash flows?
Relevant cash flows
942400
What is the relevant cash flows if the market price of the machine is $600,000?
Relevant cash flows
662400
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