Determining the ordinary income and capital gains

Reference no: EM13745542

A firm has decided to replace an existing asset with a newer Model. The existing asset originally cost $30,000 . The current book value of the existing asset for tax purposes is $ 14,400. The existing asset can be sold for $ 25,000. The new asset will cost $ 75,000. If the assumed tax rate is 40 % on ordinary income and capital gains, the initial investment is ________

Reference no: EM13745542

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