Your firm purchased machinery with a 7-year MACRS life for $10 million. The project, however, will end

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Your firm purchased machinery with a 7-year MACRS life for $10 million. The project, however, will end after 5 years. If the equipment can be sold for $4.5 million at the completion of the project, and your firm's tax rate is 35%, what is the after-tax cash flow from the sale of the machinery?

Your firm purchased machinery with a 7-year MACRS life for

Table 9.2
Tax depreciation allowed under MACRS

 

Year(s)7 Year
114.29%
224.49%
317.49%
412.49%
58.93%
68.92%
78.93%
84.46%
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Related Book For  answer-question

Fundamentals of Corporate Finance

ISBN: 978-0078034640

7th edition

Authors: Richard Brealey, Stewart Myers, Alan Marcus

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