You purchased a machine for $1.02 million three years ago and have been applying straight-line depreciation to zero for a seven-year life. Your tax rate is 40%. If you sell the machine today (after three years of depreciation) for $731,000, what is your incremental cash flow from selling the machine?

EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter9: Capital Budgeting And Cash Flow Analysis
Section: Chapter Questions
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You purchased a machine for $1.02
million three years ago and have been
applying straight-line depreciation to
zero for a seven-year life. Your tax rate
is 40%. If you sell the machine today
(after three years of depreciation) for
$731,000, what is your incremental cash
flow from selling the machine?
Transcribed Image Text:You purchased a machine for $1.02 million three years ago and have been applying straight-line depreciation to zero for a seven-year life. Your tax rate is 40%. If you sell the machine today (after three years of depreciation) for $731,000, what is your incremental cash flow from selling the machine?
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