Kewlin Hotels is considering replacing their heavy kitchen equipment. The equipment was purchased 4 years ago at a total cost of $20,000. It is being depreciated straight-line to a zero value over 8 years. If Kewlin sells the kitchen equipment for $10,000, what is the after-tax cash flow to Kewlin? (use 40% as the tax rate).

Answer rating: 100% (QA)

To calculate the aftertax cash flow we need to consider the book value of the equipment the sale pr... View the full answer