A Bakery Invests $40,000 in a Light Delivery Truck

question 50

Multiple Choice

A bakery invests $40,000 in a light delivery truck. This was depreciated using the five-year MACRS schedule shown above. If the company sold it immediately after the end of year 2 for $21,000, what would be the after-tax cash flow from the sale of this asset, given a tax rate of 40%?

• A) $11,520
• B) $9480
• C) $3792
• D) $17,208

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Definitions:

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National Highway Traffic Safety Administration

A U.S. government agency responsible for enforcing vehicle performance standards and reducing deaths, injuries, and economic losses resulting from motor vehicle crashes.

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Vehicles that are self-propelled and used for transportation on roads.

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