Suppose Sky Loom Industries sells a fixed asset for $95,000 when its book value is $110,000. If the company's marginal tax rate is 25%, what will be the after-tax cash flow from this sale?

Financial Management: Theory & Practice
16th Edition
ISBN:9781337909730
Author:Brigham
Publisher:Brigham
Chapter7: Corporate Valuation And Stock Valuation
Section: Chapter Questions
Problem 1P: Ogier Incorporated currently has $800 million in sales, which are projected to grow by 10% in Year 1...
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Can you show me the correct approach to solve this financial accounting problem using suitable standards?

Suppose Sky Loom Industries sells a fixed
asset for $95,000 when its book value is
$110,000. If the company's marginal tax rate
is 25%, what will be the after-tax cash flow
from this sale?
Transcribed Image Text:Suppose Sky Loom Industries sells a fixed asset for $95,000 when its book value is $110,000. If the company's marginal tax rate is 25%, what will be the after-tax cash flow from this sale?
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