Winslow, Inc A)$37,036
B)$38,880
C)$46,108
D)$47,770
E)$53,892

question 10

Multiple Choice

Winslow, Inc.is considering the purchase of a $225,000 piece of equipment.The equipment is classified as 5-year MACRS property.The company expects to sell the equipment after four years at a price of $50,000.What is the after-tax cash flow from this sale if the tax rate is 35%?
$$\begin{array}{l}\text { MACRS 5-year property }\\\begin{array} { c c } \underline{\text { Year }} & \underline{\text { Rate} } \\ 1 & 20.00 \% \\2 & 32.00 \% \\3 & 19.20 \% \\4 & 11.52 \% \\5 & 11.52 \% \\6 & 5.76 \%\end{array}\end{array}$$

• A)$37,036
• B)$38,880
• C)$46,108
• D)$47,770
• E)$53,892

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Definitions:

Incentive Fee Contract

A contract type that provides additional compensation to the contractor for exceeding performance targets.

Cost Reimbursable Contract

A contract where the buyer reimburses the contractor for all legitimate costs incurred plus an additional fee for profit.

Fixed Fee

A fixed fee is a pricing structure where a single set price is agreed upon for a service or project, regardless of the time or resources used.

Cost Reimbursable Contract

A type of contract where the buyer reimburses the seller for the seller's allowable costs, plus a fee representing the seller's profit.