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Eastern Inc

question 30

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Eastern Inc.purchases a machine for $15,000.This machine qualifies as a five-year recovery asset under MACRS with the fixed depreciation percentages as follows: year 1 = 20.00%; year 2 = 32.00%; year 3 = 19.20%; year 4 = 11.52%.Eastern has a tax rate of 20%.If the machine is sold at the end of four years for $4,000,what is the cash flow from disposal?


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