Try Again The first step involves calculating the accumulated depreciation after four years using a seven-year life and MACRS depreciation, LOADING.... You must add up the MACRS percentages for the first four years and multiply the sum by the cost: accumulated depreciation equals cost times left parenthesis 0.1429 plus 0.2449 plus 0.1749 plus 0.1249 right parenthesis The next step is to find the book value by subtracting the accumulated depreciation from the cost: book value equals cost minus accumulated depreciation Before you can find the after-tax cash flow, you must calculate the gain (or loss) by subtracting the book value from the selling price: gain left parenthesis or loss right parenthesis equals selling price minus book value The next step is to calculate the tax liability (or tax savings) by multiplying the gain (or loss) by the tax rate: tax liability left parenthesis or tax savings right parenthesis equals gain left parenthesis or loss right parenthesis times tax rate Now, the after-tax cash flow can be calculated by subtracting the tax liabiklity from (or adding the tax credit to) the selling price: after dash tax cash flow equals selling price minus tax liability or after dash tax cash flow equals selling price plus tax credit