A business purchases depreciable equipment for $300and sells it several years later for $240. At the time ofthe sale, accumulated depreciation totals $160. If thecompany's tax rate is 30%, what is the total after-taxcash flow that will result from selling this asset?

Step 1: Definition of After-Tax Cash Flow from Asset SaleAfter-tax cash flow from the sale of an…

Answered: A business purchases depreciable…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter2: The Domestic And International Financial Marketplace

Section2.A: Taxes

Problem 7P

See similar textbooks

Similar questions

A business purchases depreciable equipment for 191 and sells it a few years later for 166. At the time of the sale, accumulated depreciation totals 106. If the company's tax rate is 39, what is the total after-tax cash flow that will result from selling this asset?
What is the total after tax cash flow that will result from selling this asset on these financial accounting question?
You decide to sell a price of equipment for $5,000. It had been depreciated to $3,000. The original purchase price was $6,000. Your tax rate is 20%. What are your after-tax proceeds from the sale? A) $400 B) $600 C) $5,000 D) $4,600 E) $5,400
What is the expected after - tax cash flow from selling a piece of equipment if Probst purchases the equipment today for $548, 860.00, the tax rate is 39.9 percent, the equipment will be sold in 3 years for $98, 800.00, and the equipment will be depreciated to $72, 600.00 over 12 years using straight - line depreciation? $106, 885.74 (plus or minus $10) $262, 538.29 (plus or minus $10) - $72, 688.20 (plus or minus $10) $230,867.00 (plus or minus $10) None of the above is within $10 of the correct answer
a. Calculate the after tax income if (1) Corrie Company keeps the warehouse and (2) if Corrie Company sells the warehouse.
Easter Corporation will replace one of its assets with an updated model. The current asset was purchased two years ago at a cost of $70,000. It has been depreciated under MACRS using a five-year recovery period. The company can sell this existing asset for $30,000. The new asset is going to cost $80,000 and will also be depreciated under MACRS using a five-year recovery period. If the assumed tax rate is 40 percent on both ordinary income and capital gains, the initial investment will be equal to what amount after adjusting for taxes?
What is the equipment's after -tax salvage value for these accounting question?
An asset that was originally purchased for $60,818 is being depreciated straight-line over its useful life. 83% of the asset has been depreciated. The asset can be sold for $35,191. If the company's tax rate is 34%, what is the after-tax salvage of this asset? Express your answer to the nearest whole number.
Pet Supply purchased fixed assets two years ago at a cost of $43,800. It no longer needs the assets, so it is going to sell them today for $32,500. The assets are classified as five-year property for MACRS. The MACRS rates are .2, .32, .192, .1152, .1152, .0576, for years 1 to 6, respectively. What is the net cash flow from the sale if the tax rate is 35%?
What is the expected after-tax cash flow from selling a piece of equipment if TwoPlus purchases the equipment today for $143,000.00, the tax rate is 23.00 percent, the equipment is sold in 2 years for $36,500.00, and MACRS depreciation is used where the depreciation rates in years 1, 2, 3, 4, and 5 are 20%, 32%, 19%, 12%, and 10%, respectively? O $17,102.80 (plus or minus $10) $37,643.10 (plus or minus $10) $50,470.20 (plus or minus $10) $43,892.20 (plus or minus $10) None of the above is within $10 of the correct answer
You buy a property for $100,000 in year 0. The building is depreciated using straight-line depreciation over 27.5 year. The NOI is $5,000 in year 1 and grows at 2% thereafter. The building is sold at a the end of year 4 at a terminal cap rate of 6%. Assume an ordinary income tax rate of 35%, a capital gains tax rate of 20%, and a depreciation recapture tax rate of 25%. What is going to be the total tax bill on the sale? O 1,187 O 1,959 O 3,146 O 3,636
Suppose Hampton Corporation sells land for $8,000,000. Hampton paid $5,000,000 for the land several years ago. Assuming a marginal tax rate of 34%, calculate the after-tax cash flow resulting from the land sale.

SEE MORE QUESTIONS

Recommended textbooks for you

EBK CONTEMPORARY FINANCIAL MANAGEMENT

Finance

ISBN:

9781337514835

Author:

MOYER

Publisher:

CENGAGE LEARNING - CONSIGNMENT

Income Tax Fundamentals 2020

Accounting

ISBN:

9780357391129

Author:

WHITTENBURG

Publisher:

Cengage

SWFT Essntl Tax Individ/Bus Entities 2020

Accounting

ISBN:

9780357391266

Author:

Nellen

Publisher:

Cengage

EBK CONTEMPORARY FINANCIAL MANAGEMENT

Finance

ISBN:

9781337514835

Author:

MOYER

Publisher:

CENGAGE LEARNING - CONSIGNMENT

Income Tax Fundamentals 2020

Accounting

ISBN:

9780357391129

Author:

WHITTENBURG

Publisher:

Cengage

SWFT Essntl Tax Individ/Bus Entities 2020

Accounting

ISBN:

9780357391266

Author:

Nellen

Publisher:

Cengage

Individual Income Taxes

Accounting

ISBN:

9780357109731

Author:

Hoffman

Publisher:

CENGAGE LEARNING - CONSIGNMENT

SEE MORE TEXTBOOKS

A business purchases depreciable equipment for $300 and sells it several years later for $240. At the time of the sale, accumulated depreciation totals $160. If the company's tax rate is 30%, what is the total after-tax cash flow that will result from selling this asset?