How do they change if the market price of the machine

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Reference no: EM131130547

Healthy Potions, Inc., a pharmaceutical company, bought a machine at a cost of $2 million five years ago that produces pain-reliever medicine. The machine has been depreciated over the past five years, and the current book value is $700,000. The company decides to sell the machine now at its market price of $1 million. The marginal tax rate is 28 percent.

Part A. What are the relevant cash flows?

Part B. How do they change if the market price of the machine is $600,000 instead?

So for part A i am looking for the cash flow and for part B im looking for the change in cash flow. Please put steps as clear as possible and also label the part a and b answers

Reference no: EM131130547

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