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Diego Inc. wants to replace a 7 - year - old machine with a new machine that is more efficient. The old machine cost $

Diego Inc. wants to replace a 7-year-old machine with a new machine that is more efficient. The old machine cost $50,000 when new and has a current book value of $12,000. Diego can sell the machine to a foreign buyer for $14,000. Diego's tax rate is 25%. What is the cash inflow that should be recorded for the initial year regarding this transaction?
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$0
$2,500
$13,500
$14,500

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