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.)
Chapter10: Capital Budgeting: Decision Criteria And Real Option
Section: Chapter Questions
Problem 2P
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![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.)](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F25c6db3c-b979-4081-9f89-763c2857a31a%2F9adf57aa-28d9-444f-890d-aae40b8f5392%2Fq8f4ul_processed.jpeg&w=3840&q=75)
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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