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What after-tax net cash flow will pacific receive

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Question - A few weeks ago, Pacific Products purchased new equipment to expand business. The purchase price of the equipment was $750,000. It cost $40,000 to ship the equipment to Pacific and another $60,000 to install it. In three years, Pacific plans to replace the equipment with more technologically advanced equipment, and at that time the company expects to be able to sell the equipment just purchased for $100,000. The equipment will be depreciated according to the MACRS 3-year class of assets. If its marginal tax rate is 40 percent, what after-tax net cash flow will Pacific receive when the machine is sold in four years?

Reference no: EM133062972

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