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What are the relevant cash flows

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Point 1: Healthy Potions, Inc., a pharmaceutical company, bought a machine at a cost of $2,000,000 five years ago that produces pain-reliever medicine. The machine has been depreciated over the past five years, and the current book value is $800,000. The company decides to sell the machine now at its market price of $1 million. The marginal tax rate is 30 percent.

Question 1: What are the relevant cash flows? How do they change if the market price of the machine is $600,000 instead?

Reference no: EM132492565

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