Question

Please show all work You purchased a machine for$1.09million three years ago and have been applying​...

Please show all work

You purchased a machine for$1.09million three years ago and have been applying​ straight-line depreciation to zero for a​ seven-year life. Your tax rate is 25%.If you sell the machine today​ (after three years of​ depreciation) for $721,000​,

what is your incremental cash flow from selling the​ machine?

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1
1] Cost of the machine $       1,090,000
Annual depreciation = 1090000/7 = $          155,714
Accumulated depreciation = 155714*3 = $          467,143
Book value on date of sale [1090000-467143] $          622,857
2] Sale price of the machine today $          721,000
Gain on sale = 721000-622857 = $ 98,143
Tax on gain = 98143*25% = $ 24,536
3] Incremental cash flow on sale = 721000-24536 = $          696,464
0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
You purchased a machine for $ 1.08 million three years ago and have been applying​ straight-line...
You purchased a machine for $ 1.08 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 $780,000​, what is your incremental cash flow from selling the​ machine? Your total incremental cash flow will be (...) ​(Round to the nearest​ cent.)
You purchased a machine for $1.18 million three years ago and have been applying​ straight-line depreciation...
You purchased a machine for $1.18 million three years ago and have been applying​ straight-line depreciation to zero for a​ seven-year life. Your tax rate is 38%. If you sell the machine today​ (after three years of​ depreciation) for $798,000​, what is your incremental cash flow from selling the​ machine?
You purchased a machine for $1.13 million three years ago and have been applying straight-line depreciation...
You purchased a machine for $1.13 million three years ago and have been applying straight-line depreciation to zero for a seven-year life. Your tax rate is 21%. If you sell the machine today (after three years of depreciation) for $729,000, what is your incremental cash flow from selling the machine?
You purchased a machine for $1.02 million three years ago and have been applying​ straight-line depreciation...
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 35%. If you sell the machine today​ (after three years of​ depreciation) for $750,000​, what is your incremental cash flow from selling the​ machine? a. Your total incremental cash flow will be ​$_____​(Round to the nearest​ cent.)
1. You purchased a machine for $ 1.16 million three years ago and have been applying​...
1. You purchased a machine for $ 1.16 million three years ago and have been applying​ straight-line depreciation to zero for a​ seven-year life. Your tax rate is 38 %. If you sell the machine today​ (after three years of​ depreciation) for $ 775 000​ what is your incremental cash flow from selling the​ machine? Your total incremental cash flow will be ​$ nothing. ​(Round to the nearest​ cent.) 2. Daily Enterprises is purchasing 10.3 million machines. It will cost...
The Tomak Company purchased a machine three years ago for $160,000. It is being depreciated on...
The Tomak Company purchased a machine three years ago for $160,000. It is being depreciated on a straight-line basis over an eight-year life to a zero salvage value. This particular machine was purchased because the firm anticipated a high level of production that never materialized. The firm is considering selling this machine and purchasing a smaller model. It could sell this machine today for its book value of $100,000. The smaller model costs $50,000, including installation costs, and would be...
Vector Corporation purchased a machine seven years ago at a cost of $840,000. The machine is...
Vector Corporation purchased a machine seven years ago at a cost of $840,000. The machine is being depreciated using the straight-line method over ten years. The tax rate is 25 percent and the discount rate is 8 percent. If the machine is sold today for $305,000, what will the aftertax salvage value be? $349,300 $276,400 $337,210 $303,420 $291,750
Three years ago you bought a machine for $1,000. You expected to use it for 10...
Three years ago you bought a machine for $1,000. You expected to use it for 10 years, and you have been depreciating it over a 10-year life using the straight-line method and an expected salvage value of $0. It is now Time 3, and you are going to sell the machine. What is the tax consequence for each of the possible sales prices below? The ordinary income tax rate is 25%, and the capital gains tax rate is 20%. What...
DISCUSS QUESTION #4 The Oxford Equipment Company purchased a machine 5 years ago at a cost...
DISCUSS QUESTION #4 The Oxford Equipment Company purchased a machine 5 years ago at a cost of $85,000. The machines expected life is 10 years and is being depreciated by the straight-line method at a rate of $8,500 per year. If the machine is kept, it can be sold for $15,000 at the end of its expected life. A new machine can be purchased for $170,000. It has an expected life of 5 years and will reduce cash operating expenses...
One year​ ago, your company purchased a machine used in manufacturing for $110,000. You have learned...
One year​ ago, your company purchased a machine used in manufacturing for $110,000. You have learned that a new machine is available that offers many advantages and you can purchase it for $160,000 today. It will be depreciated on a​ straight-line basis over 10 years and has no salvage value. You expect that the new machine will produce a gross margin​ (revenues minus operating expenses other than​ depreciation) of $45,000 per year for the next 10 years. The current machine...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT