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Suppose a company is selling an asset for a sale price of $500,000. Four years ago the asset cost $1.5 million to purchase and install.

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Suppose a company is selling an asset for a sale price of $500,000. Four years ago the asset cost $1.5 million to purchase and install. The asset has been depreciated using the 5-year MACRS schedule. The firm pays a tax rate of 35%. What are the cash flow implications of this sale? Q 9

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