Alpha Corporation has the opportunity to invest in a machine that costs $500,000. The economic life of the machine is 5 years and the company follows straight line depreciation method. Assume salvage value is zero. Corporate Tax rate is 20%. If the company decides to sell the machine after 3 years for $ 400,000,

 (a) what will be net cash flow from the sale of machine?

(b) if the sale price after 3 years is $150,000, what will be the nest cash flow from the sale of machine?

Answer rating: 100% (QA)

a Net cash flow from the sale of the machine after 3 years can be calculated by considering the book ... View the full answer