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Epps Movie Co. plans to sell a movie theater after operating it for five years. The movie theater is expected to sell for $2 million

Epps Movie Co. plans to sell a movie theater after operating it for five years. The movie theater is expected to sell for $2 million and originally cost $1.5 million. Accumulated depreciation on the theater is $1 million. During the last year of operation, the theater is expected to have net cash flows of $150,000. If the tax rate is 40%, what is the terminal cash flow?

$600,000

$500,000

$1,400,000

$1,550,000

None of the above.

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