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allsm [11]
2 years ago
5

A firm has a machine it can sell for $40,000. The book value of the machine is currently $20,000. If the firm sells the machine,

what are the net proceeds from the sale? Assume that the tax rate is 40%. Round to the nearest penny.
Business
1 answer:
Law Incorporation [45]2 years ago
7 0

Answer:

the net proceeds from the sale is $32,000

Explanation:

The computation of the net proceeds from the sale is shown below:

Net Proceeds = Sale Price - Tax × (Sale price - purchase price)

=  $40,000 - 40% × ($40,000  - $20,000)

= $40,000 - $8,000

= $32,000

Hence, the net proceeds from the sale is $32,000

We simply applied the above formula so that the correct value could come

And, the same is to be considered

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