Cowboy Company Wishes to Sell a Machine with a Book

question 26

Essay

Cowboy Company wishes to sell a machine with a book value of $40,000.The income tax rate is 30%.The machine is sold for $60,000.
Required:
A) What is the net after-tax cash flow from the sale of the machine? Is it an inflow or outflow?
B) If the machine is sold for $30,000, what is the net after-tax cash flow from the sale of the machine?

• A) What is the net after-tax cash flow from the sale of the machine? Is it an inflow or outflow?
• B) If the machine is sold for $30,000, what is the net after-tax cash flow from the sale of the machine?

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Definitions:

Transgenic Crops

Crops that have been genetically modified to express a gene from another species, conferring beneficial traits such as pest resistance or increased yield.

Pesticide-Resistant

Refers to pests that have developed a resistance to pesticides through genetic mutation or adaptation, reducing the effectiveness of the pesticides.

Pest-Resistant

A characteristic of plants that have the ability to withstand or repel attacks from pests, reducing the need for chemical pesticides.

Gene Flow

The movement of alleles between local populations due to the migration of individuals; can have significant evolutionary consequences.