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In year 1, Firm A paid $51,000 cash to purchase a tangible business asset. In year 1 and year 2, it deducted $3,200 and $7,300
In year 1, Firm A paid $51,000 cash to purchase a tangible business asset. In year 1 and year 2, it deducted $3,200 and $7,300 depreciation with respect to the asset. Firm As marginal tax rate in both years was 21 percent. Required: Compute Firm As net cash flow attributable to the asset purchase in each year. Compute Firm As adjusted basis in the asset at the end of each year.
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