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TRL, Inc. is purchasing new computer equipment. As part of the investment project, old computer equipment is being sold. The old equipment was originally purchased
TRL, Inc. is purchasing new computer equipment. As part of the investment project, old computer equipment is being sold. The old equipment was originally purchased three years ago. At the time of purchase, it was expected to have a five-year life and no salvage value, resulting in a current book value of $27,000. TRL's management is disposing of the old equipment for a sales price of $16,000. What impact does this loss on the sale of the old equipment have on the investment project's net cash flows? Net cash inflows from the old equipment's sale plus the tax effect of the loss deduction Net cash inflows from the old equipment's sale less the tax effect of the loss deduction Net cash inflows from the old equipment's sale There is no effect because the loss is recorded as part of the accrual accounting system for determining net income
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