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aev [14]
3 years ago
13

"Eastern Corporation has $21,000,000 in equipment that has a 15 year class life. The equipment is 8 years old. Eastern is sellin

g the equipment for $10,000,000. Eastern uses simplified straight line depreciation (zero salvage value) and has a marginal tax rate of 34%. What is the terminal cash flow? Assume no working capital."
Business
1 answer:
Alex787 [66]3 years ago
3 0

Answer:

terminal cash flow $932,000

Explanation:

21,000,000/15 = 1,400,000

1,400,000 x 8 = 11,200,000

<u>Net Book Value:</u> 21,000,000 - 11,200,000 = 9,800,000

Sale                                                                10,000,000

Gain                                                                   200,000

<u>We must pay taxes for the gain:</u>

200,000 x .34 = 68,000

<u>terminal cash flow:</u> proceeds - taxes = 10,000,000 - 68,000 = 932,000

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Correct option is D

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When Canada Dry first introduced Wink soda in the 1960s, it used the slogan, "Join the cola dropouts." The purpose of this adver
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Explanation:

Since Wink soda was a new product of Canada Dry, <u>it needed a catchy slogan to create awareness and invite customers to try out the product.</u>

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4 years ago
Which of the following would decrease aggregate demand? a) an improvement in consumer confidence b) a decrease in the foreign ex
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​In the context of consumer learning, which of the following statements is true of direct experience?​ Select one:
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8 0
3 years ago
Amy​ Parker, a​ 22-year-old and newly hired marine​ biologist, is quick to admit that she does not plan to keep close tabs on ho
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Final Value= $370,481.13

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Giving the following information:

Amy's contribution, plus that of her​ employer, amounts to ​$2,150 per year starting at age 23. Amy expects this amount to increase by 3​% each year until she retires at the age of 57 ​(there will be 35 EOY​ payments). Interest rate= 5%.

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3 years ago
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