An asset purchased for $100,000 with S = $20,000 after 5 years was depreciated using the 5-year MACRS rates. Expenses averaged $18,000 per year and the effective tax rate is 30%. The asset was actually sold after 5 years of service for $22,000. MACRS rates in years 5 and 6 are 11.52% and 5.76%, respectively. The after-tax cash flow from the sale is closest to: (a) $27,760 (b) $17,130 (c) $26,870 (d) $20,585

ENGR.ECONOMIC ANALYSIS
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Chapter1: Making Economics Decisions
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An asset purchased for $100,000 with S = $20,000
after 5 years was depreciated using the 5-year
MACRS rates. Expenses averaged $18,000 per
year and the effective tax rate is 30%. The asset
was actually sold after 5 years of service for
$22,000. MACRS rates in years 5 and 6 are 11.52%
and 5.76%, respectively. The after-tax cash flow
from the sale is closest to:
(a) $27,760
(b) $17,130
(c) $26,870
(d) $20,585

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