Deer and Doe purchased $120,000 of equipment six years ago. The equipment is 7-year MACRS property....

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Finance

Deer and Doe purchased $120,000 of equipment six years ago. Theequipment is 7-year MACRS property. The firm is selling thisequipment today for $24,500. What is the after-tax cash flow fromthis sale if the tax rate is 35 percent?
Year 1 2 3 4 5 6 7 8
Percent 14.29 24.49 17.49 12.49 8.93 8.93 8.93 4.45
a.
$27,455.40
b.
$25,785.40
c.
$15,925.00
d.
$21,544.60
e.
$18,209.60

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Computation of annual depreciation expense and book value of the equipment Year Initial cost of equipment C MACRS R Annual depreciation C x R See Answer

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Deer and Doe purchased $120,000 of equipment six years ago. Theequipment is 7-year MACRS property. The firm is selling thisequipment today for $24,500. What is the after-tax cash flow fromthis sale if the tax rate is 35 percent?Year 1 2 3 4 5 6 7 8Percent 14.29 24.49 17.49 12.49 8.93 8.93 8.93 4.45a.$27,455.40b.$25,785.40c.$15,925.00d.$21,544.60e.$18,209.60

	a.	$27,455.40
	b.	$25,785.40
	c.	$15,925.00
	d.	$21,544.60
	e.	$18,209.60