Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 MACRS Depreciation Rate 20.00% 32.00% 19.20% 11.52% 11.52% 5.76% A bakery invests $36,000

Year 0

Year 1

Year 2

Year 3

Year 4

Year 5

MACRS

Depreciation Rate

20.00%

32.00%

19.20%

11.52%

11.52%

5.76%

A bakery invests $36,000 in a light delivery truck. This was depreciated using the five-year MACRS schedule shown above. If the company sold it immediately after the end of year 2 for $20,000, what would be the after-tax cash flow from the sale of this asset, given a tax rate of 20%?

A.$9,632

B.$1,926

C.$10,368

D.$18,074

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Real Estate Finance

Authors: John P. Wiedemer

8th Edition

0324142900, 9780324142907

More Books

Students also viewed these Finance questions