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 $298,000.
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 $298,000.
a. What is the book value of the equipment?
b. If Jones sells the equipment today for $183,000 and its tax rate is 35 % what is the after-tax cash flow from selling it?
c. Just before it is about to sell the equipment, Jones receives a new order. It can take the new order if it keeps the old equipment. Is there a cost to taking the order and if so, what is it? Explain. (Assume the new order will consume the remainder of the machine's useful life.)
Note: Assume that the equipment is put into use in year 1.
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Fanatical Prospecting The Ultimate Guide To Opening Sales Conversations And Filling The Pipeline By Leveraging Social Selling Telephone Email Text And Cold Calling
Authors: Jeb Blount, Mike Weinberg
1st Edition
1119144752, 978-1119144755
