Def company inc purchased a 3c copier for $500,000 one year and nine months ago. The assets has a six year life and has been depreciated according to the following accelerated schedule Year. 1. 2. 3. 4. 5. 6. % of cost. 55. 20. 10. 5. 5. 5 the press was just sold for $125,000. The firms marginal tax rate is 35%. Calculate DEF's taxable profit and cash flow on the sale. Assume depreciation is spread evenly within each year.

Def company inc purchased a 3c copier for $500,000 one year and nine months ago. The assets has a six year life and has been depreciated according to the following accelerated schedule Year. 1. 2. 3. 4. 5. 6. % of cost. 55. 20. 10. 5. 5. 5 the press was just sold for $125,000. The firms marginal tax rate is 35%. Calculate DEF's taxable profit and cash flow on the sale. Assume depreciation is spread evenly within each year.

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter10: Capital Budgeting: Decision Criteria And Real Option

Section: Chapter Questions

Problem 20P

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