A Textile Company Invests $10 Million in an Open-End Spinning

question 29

Multiple Choice

A textile company invests $10 million in an open-end spinning machine. This was depreciated using the seven-year MACRS schedule shown above. If the company sold it immediately after the end of year 3 for $7 million, what would be the after-tax cash flow from the sale of this asset, given a tax rate of 40%?

• A) $1,550,400
• B) $3,124,000
• C) $3,876,000
• D) $5,449,600

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Definitions:

Neuron-produced Chemicals

Chemicals, such as neurotransmitters, that are produced by neurons to transmit signals across the synapse to another neuron.

All-or-none Response

A principle that states a neuron fires with the same potency each time, although frequency can vary; it either fires or doesn't.

Electrical Charge

A fundamental property of matter that is responsible for electrical phenomena, existing in a positive or negative form.

Threshold

The level of intensity that must be exceeded for a certain reaction, phenomenon, result, or condition to occur or be manifested.