Stockholm Company is considering the sale of a machine with the following characteristics. Book value Remaining...
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Stockholm Company is considering the sale of a machine with the following characteristics. Book value Remaining useful life Annual straight-line depreciation Current market value P120,000 5 years P24,000 P70,000 If the company sells the machine its cash operating expenses will increase by P30,000 per year due to an operating lease. The tax rate is 40%. Required: 1. Find the cash flow from selling the machine. 2. Calculate the increase in annual net cash outflows as a result of selling the machine. MATROS n1 I Stockholm Company is considering the sale of a machine with the following characteristics. Book value Remaining useful life Annual straight-line depreciation Current market value P120,000 5 years P24,000 P70,000 If the company sells the machine its cash operating expenses will increase by P30,000 per year due to an operating lease. The tax rate is 40%. Required: 1. Find the cash flow from selling the machine. 2. Calculate the increase in annual net cash outflows as a result of selling the machine. MATROS n1 I
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Financial Accounting and Reporting
ISBN: 978-0273744443
14th Edition
Authors: Barry Elliott, Jamie Elliott
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