Your firm purchased machinery with a 7-year MACRS life for $10.8 million. The project, however, will end after 4 years. If the equipment can be sold for $5.3 million at the completion of the project, and your firm's tax rate is 30%, what is the after-tax cash flow from the sale of the machinery? Use MACRS depreciation schedule. (Enter the answer in millions rounded to 4 decimal places.)
Your firm purchased machinery with a 7-year MACRS life for $10.8 million. The project, however, will end after 4 years. If the equipment can be sold for $5.3 million at the completion of the project, and your firm's tax rate is 30%, what is the after-tax cash flow from the sale of the machinery? Use MACRS depreciation schedule. (Enter the answer in millions rounded to 4 decimal places.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Your firm purchased machinery with a 7-year MACRS life
for $10.8 million. The project, however, will end after 4
years. If the equipment can be sold for $5.3 million at the
completion of the project, and your firm's tax rate is 30%,
what is the after-tax cash flow from the sale of the
machinery? Use MACRS depreciation schedule. (Enter the
answer in millions rounded to 4 decimal places.)
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