A company sells equipment for $225,000 when its book value is $250,000. If the company's marginal tax rate is 35%, calculate the effect on cash flows from this sale.

Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter6: Accounting For Financial Management
Section: Chapter Questions
Problem 11P: The Berndt Corporation expects to have sales of 12 million. Costs other than depreciation are...
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A company sells equipment for $225,000 when its book
value is $250,000. If the company's marginal tax rate is
35%, calculate the effect on cash flows from this sale.
Transcribed Image Text:A company sells equipment for $225,000 when its book value is $250,000. If the company's marginal tax rate is 35%, calculate the effect on cash flows from this sale.
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