A Machine Is Purchased for $500,000 and Is Used Through

question 96

Multiple Choice

A machine is purchased for $500,000 and is used through the end of Year 2.The machine will be depreciated using the 3-Year MACRS schedule.At the end of Year 2,the machine is sold for $75,000.What is the after-tax cash flow from the sale of the machine at the end of Year 2 if the firm's marginal tax rate is 40%?

• A)$37,050
• B)$15,180
• C)$37,950
• D)$59,820

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Definitions:

Epigenesis

The process by which a new phenotypic form emerges through the interactions of the preceding form and its current environment.

Zygote

The earliest developmental stage of an embryo, formed when a sperm cell fertilizes an egg cell, which then begins to divide and grow.

Germinal Period

The initial two weeks of prenatal development following conception, characterized by rapid cell division and the beginning of cell differentiation.

Implantation

The process by which a fertilized egg attaches to the lining of the uterus to begin pregnancy.