In December of 20x4, Memphis Plastics sold a forklift for $9,255. The machine was purchased in 20x1 for $50,000. Since then $38,845 in depreciation has been recorded on the forklift.

Required:

1. What was the forklift’s book value at the time of sale?

2. Compute the gain or loss on the sale.

3. Determine the after-tax cash flow at the time the forklift was sold. The firm’s tax rate is 45 percent.