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Denali Corporation is considering selling one of the following assets. Denalis marginal tax rate is 25% and it has no capital gains or losses from
Denali Corporation is considering selling one of the following assets. Denalis marginal tax rate is 25% and it has no capital gains or losses from any prior tax year, nor does Denali expect to incur any other gains or losses on property transactions during the current year besides the chosen alternative from the options below. Denali expects to have sufficient ordinary income in the current year to be able to deduct any losses, if permitted to do so, generated from the sale of the below assets. Calculate the post-tax cash flow that Denali would generate from selling the following three assets. Which alternative would yield the greatest post-tax cash flow? Option A: Sell land for $60,500. Denali acquired the land seven years ago for $89,000 and has held it as an investment ever since. Option B: Sell business-use equipment for $58,000. Denali acquired the equipment four years ago for $130,000 and has claimed $56,000 in accumulated depreciation on it. Option C: Sell business-use machinery for $67,000. Denali acquired the machinery five years ago for $200,000 and has claimed $145,000 in accumulated depreciation on it
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