What is the after-tax cash flow from selling the machine

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Questions -

Q1. Which of the following items should be excluded in after tax free cash flow?(all relating to a project)

a. additions to working capital

b. incremental operating expenses

c. interest expense

d. capital expenditures

Q2. Asus is planning to introduce a new model of laptop, which is expected to reduce the sales of the company's existing products. Is the reduction in sales of Asus' current products a relevant cash flow for evaluating the introduction of the new model? "

Not relevant - sunk cost

Relevant - opportunity cost

Relevant - side effect

Not relevant - financing cost

Q3. Eternal Ltd requires a machine for its 7-year project. The cost of the machine is $500,000 and its useful life is 10 years. The tax regulation allows the machinery to be depreciated for 10 years on a straight-line basis with a zero salvage value. At the end of 7 years, Eternal Ltd expects to sell the machine for $200,000. If the company faces a 30% tax rate, what is the after-tax cash flow from selling the machine?

Reference no: EM133171456

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