Question
Compute the total cash flow generated if a corporation sells an old truck which was purchased 2 years ago for $100,000. It was depreciated as
Compute the total cash flow generated if a corporation sells an old truck which was purchased 2 years ago for $100,000. It was depreciated as a 5 year MACRS asset. (Depreciation rate is .20 and .32 for year 1 and 2, respectively.)Assume the tax rate is 40%. Calculate the cash flows from this sale for case a and b below:
a) Assume it is sold for 70,000. b) Assume it is sold for 10,000.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Essential Finance Guide
Authors: DK Publishing
1st Edition
078948157X, 978-0789481573
