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for the applicable depreciation percentages ) and expects to sell the machine to net $ 9 , 6 0 0 before taxes at the end
for the applicable depreciation percentages and expects to sell the machine to net $ before taxes at the end of its usable life. The firm is subject to a tax rate.
a Calculate the terminal cash flow for a usable life of three years, five years, and seven years.
b Discuss the effect of usable life on terminal cash flows using your findings in part
c Assuming a fiveyear usable life, calculate the terminal cash flow if the machine were sold to net $ or $before taxes at the end of five years.
d Discuss the effect of sale price on terminal cash flow using your findings in part
Data table
a Calculate the terminal cash flow for a usable life of years, years, and years.
The following table can be used to solve for the terminal cash flow: Round to the nearest dollar.
Click on the icon here in order to copy the contents of the data table below into a spreadsheet.
Rounded Depreciation Percentages by Recovery Year Using MACRS for
First Four Property Classes
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