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A firm is considering the purchase of equipment costing $250,000. Assume the equipment is depreciated straight-line over
Posted: Fri Jul 01, 2022 7:50 am
by answerhappygod
- A Firm Is Considering The Purchase Of Equipment Costing 250 000 Assume The Equipment Is Depreciated Straight Line Over 1 (20.49 KiB) Viewed 37 times
A firm is considering the purchase of equipment costing $250,000. Assume the equipment is depreciated straight-line over a 5-year useful life. The firm estimates the equipment will generate $88,000 in yearly incremental after-tax cash flows for 4 years. At the end of the project, the equipment will be sold for $75,000. If the tax rate is 20%, what is the after-tax cash flow generated from the sale of the equipment (in year 4). Multiple Choice O $60,000 $70,000 $50,000 $75,000