Young Company Received $18,000 Cash from the Sale of a Machine

question 83

Multiple Choice

Young Company received $18,000 cash from the sale of a machine that had a $13,000 book value. If the company is subject to a 30% income tax rate, the net cash flow to use in a discounted-cash-flow analysis would be:

• A) $3,500.
• B) $6,500.
• C) $12,600.
• D) $16,500.
• E) $19,500.

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Definitions:

Equilibrium Conditions

The state in a market where the supply of goods matches demand, with no incentive for change in price or quantity.

Technological Change

Innovations and improvements in technology that typically increase productivity and efficiency.

Automobile Industry

A sector of the economy focused on the manufacturing, designing, and marketing of motor vehicles.

Input Markets

Markets where resources or inputs used for production, such as labor, materials, and machinery, are bought and sold.