Purchase Solution

After tax cash flow from the sale of the equipment

Not what you're looking for?

Ask Custom Question

Salvage Value. Quick Computing installed its previous generation of computer chip manufacturing equipment 3 years ago. Some of the older equipment will become unnecessary when the company goes into production of it's new product. The obsolete equipment, which originally cost $40 million, has been depreciated straight-line over an assumed tax life of 5 years, but it can be sold now for $18 million. The firm's after tax rate is 35 percent. What is the after tax cash flow from the sale of the equipment?

Purchase this Solution
Solution Summary

The solution provides the steps to calculate the after tax cash flow from the sale of the equipment.

Purchase this Solution
Free BrainMass Quizzes
Accounting: Statement of Cash flows

This quiz tests your knowledge of the components of the statements of cash flows and the methods used to determine cash flows.

Marketing Management Philosophies Quiz

A test on how well a student understands the basic assumptions of marketers on buyers that will form a basis of their marketing strategies.

Understanding the Accounting Equation

These 10 questions help a new student of accounting to understand the basic premise of accounting and how it is applied to the business world.

Paradigms and Frameworks of Management Research

This quiz evaluates your understanding of the paradigm-based and epistimological frameworks of research. It is intended for advanced students.

IPOs

This Quiz is compiled of questions that pertain to IPOs (Initial Public Offerings)

View More Free Quizzes
Related BrainMass Solutions

  • 7 year MACRS calculations

    Thanks Shows how to calculate the after tax cash flow from sale of an asset before its MACRS life.

  • Capital budgeting

    Note: this question addresses ONLY the after-tax salvage value, i.e., the after-tax cash flow from the sale of the equipment. This question does NOT address any other terminal year cash flows.

  • Direct and Indirect Cash Flow Statements

    Cash flow from Investing activities Sale of investments $52,000 Proceeds from sale of equipment $3,000 Purchase of equipment $(32,000) Cash flow from Investing activities $23,000 Cash flow from Financing

  • Capital Budgeting for High Tech Production Inc

    What will be the tax or the tax benefit from the sale and the net cash inflow from the sale of the new equipment? j. What is the present value of the net cash inflow from the salvage of the new equipment? k.

  • Salvage Value of a Project

    on sale $- Less: Tax @ 40% $- Net cash flow $100,000 2 Terminal cash flow NOWC $340,000 Sale of equipment, net of tax $124,000 Terminal cash flow $464,000 Sale of equipment, net

  • Cash dividends are demonstrated

    If the equipment can be sold for $4.5 million at the completion of the project, and your firm's tax rate is 35 percent, what is the after-tax cash flow from the sale of the machinery? 2. Cash Dividends.

  • Incremental after-tax cash flows

    ) Tax benefit on new machine 3,944 Total cash flow (87,800) 11,920 29,160 26,456 23,500 29,764 The solution explains how to calculate the incremental after-tax cash flows

  • Allen Air: Cash Flow Estimate Calculations

    417128 Cash flow estimate and risk analysis for Allen Air: Equipment after tax salvage value Allen Air is now in the terminal year of a project. The equipment originally co has $20m, of which 80% has been depreciated.

  • Capital Budgeting: Analyzing a New Project

    The equipment originally cost $20,000, of which 75% has been depreciated. Bing can sell the used equipment today for $6,000, and its tax rate is 40%. What is the equipment's net after-tax salvage value for use in a capital budgeting analysis?

View More Related Solutions