Question
The Jones Company has just completed the third year of a five-year MACRS recovery period for a piece of equipment it originally purchased for $296,000.
The Jones Company has just completed the third year of a five-year MACRS recovery period for a piece of equipment it originally purchased for
$296,000.
a. What is the book value of the equipment?
b. If Jones sells the equipment today for
$181,000
and its tax rate is
35%,
what is the after-tax cash flow from selling it?
Note:
Assume that the equipment is put into use in year 1.
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Fundamentals of Investing
Authors: Scott B. Smart, Lawrence J. Gitman, Michael D. Joehnk
12th edition
978-0133075403, 133075354, 9780133423938, 133075400, 013342393X, 978-0133075359
