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:

Sociohistorical Context

The social and historical setting that influences an event, idea, or concept, providing a backdrop that helps to understand contemporary issues.

Freud's Theory

A set of psychoanalytic theories developed by Sigmund Freud that emphasize the influence of the unconscious mind on behavior.

Prevailing Values

Dominant or most commonly held beliefs, standards, or principles within a society, organization, or community.

Observable Behaviours

Actions or responses of an individual that can be directly seen and measured.