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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Intellectual Ability

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A mental disorder characterized by distorted thinking, perceptions, emotions, language, sense of self, and behavior.

Cognitive-behaviour Therapy

A form of psychological treatment that addresses dysfunctional emotions, behaviors, and cognitions through a goal-oriented, systematic procedure.