A manufacturing company purchased a machine on January 1 for $120. The expected useful life...
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Accounting
A manufacturing company purchased a machine on January 1 for $120. The expected useful life is 4 years, and the expected salvage value is $20. The company uses straight-line depreciation. Suppose the company sold the machine for $62 on January 1 of year 3 (i.e., right after the 2nd year of depreciation expense was recorded).
What is the effect of the sale on the firm's pre-tax income (i.e., net income ignoring taxes)?
Ignore taxes
Round to the nearest dollar
Omit $ signs
Use a minus sign (-) if your answer is negative (i.e., the transaction decreased pre-tax income)
This question uses randomized numbers that may change if you start over
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