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Machine Depreciation and After Tax Sale Proceeds

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Operating Cash Flows. Talia's Tutus bought a new sewing machine for $40,000 that will be depreciated using the MACRS depreciation schedule for a 5-year recovery period.

a. Find the depreciation charge each year.
b. If the sewing machine is sold after 3 years for $22,000, what will be the after-tax proceeds on the sale if the firm's tax bracket is 35 percent?

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Solution Summary

Response helps in telling about the steps to compute the machine depreciation and after tax sale proceeds

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Value of Sewing maching 40000

CALCULATION OF DEPRECIATION YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 YEAR ...

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