Ronnie's Custom Cars purchased some fixed assets two years ago for $35,000. The assets are classified as 5-year property for MACRS. Ronnie is considering selling these assets now so he can buy some newer fixed assets which utilize the latest in technology. Ronnie has been offered $19,500 for his old assets. What is the net cash flow from the salvage value if the tax rate is 34 percent?
Ronnie's Custom Cars purchased some fixed assets two years ago for $35,000. The assets are classified as 5-year property for MACRS. Ronnie is considering selling these assets now so he can buy some newer fixed assets which utilize the latest in technology. Ronnie has been offered $19,500 for his old assets. What is the net cash flow from the salvage value if the tax rate is 34 percent?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question
Please Explain the following thoroughly Include how to find the Book value and formula and how to to find the net cash flow with formula.
Ronnie's Custom Cars purchased some fixed assets two years ago for $35,000. The assets are
classified as 5-year property for MACRS. Ronnie is considering selling these assets now so
he can buy some newer fixed assets which utilize the latest in technology. Ronnie has been
offered $19,500 for his old assets. What is the net cash flow from the salvage value if the tax
rate is 34 percent?
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