What is the asset book value

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Reference no: EM132034235

1. A machine on January 1, 20x1 at a cost of $400,000. Assume that the machine has a useful life of five years and a salvage value of $50,000. At the end of year 20x2, after recording depreciation for the year, the company's Accumulated Depreciation account contains a balance of $140,000. What is the asset book value at the end of 20x2?

a. $210,000

b. $260,000

c. $400,000

d. $350,000

2. Assume a corporation has earnings before depreciation and taxes of $102,000, depreciation of $40,000 and that it is in a 35% tax bracket. Compute its cash flow using the following format.

earnings before depreciation and taxes

depreciation

earnings before taxes

taxes

earnings after taxes

depreciation

cash flow

Reference no: EM132034235

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