AccountingYour firm is selling a 3-year old machine that has a 5-year class life. The machine originally cost$580,000 and required no investment in net working capital at the time of installation. Your firm isselling the asset for $180,000. Your firm's marginal tax rate is 34%. What is the cash flow effectfrom selling this machine?

Calculation of Profit/ loss on sale of fixed assets Original costs=$580000 Depreciation=$580000÷5yrs…

Answered: selling the asset for $180,000. Your…

selling the asset for $180,000. Your firm's marginal tax rate is 34%. What is the cash flow effect from selling this machine?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.

Question

Accounting
Your firm is selling a 3-year old machine that has a 5-year class life. The machine originally cost
$580,000 and required no investment in net working capital at the time of installation. Your firm is
selling the asset for $180,000. Your firm's marginal tax rate is 34%. What is the cash flow effect
from selling this machine?

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