Calculate heald and swenson''s taxable profit

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Reference no: EM131007474

1. If the Johnson Company of Problem 1 is subject to a marginal tax rate of 34%, what is the cash flow associated with the sale of the used truck?

2. Heald and Swenson Inc. purchased a drill press for $850,000 one year and nine months ago. The asset has a six-year life and has been depreciated according to the following accelerated schedule.

Year	Percent of Cost
1	55%
2	20%
3	10%
4	5%
5	5%
6	5%

The press was just sold for $475,000. The firm's marginal tax rate is 35%. Calculate Heald and Swenson's taxable profit and cash flow on the sale. Assume depreciation is spread evenly within each year.

Reference no: EM131007474

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