Louwers Corporation recently sold a used machine for $50,000 . The machine had a book value of $75,000 at the time of the sale. What is the after-tax cash flow from the sale, assuming the company's marginal tax rate is 25 percent?
a. $43,750
b. $50,000
c. $56,250
d. $75,000
C
Loss of $25,000 generates a tax savings of $6,250 ($25,000 * 25%)
Proceeds + Tax Savings = After-tax cash flow
$50,000 + $6,250 = $56,250
You might also like to view...
When the licensor provides the licensee with a complete brand concept and operating system, the arrangement is called contract manufacturing
Indicate whether the statement is true or false
Recording a purchase of inventory using QuickBooks involves all the following steps except:
A. Receive item and record as inventory B. Receive bill and record obligation to pay vendor later C. Create invoice order to bill customers for purchases D. Create purchase order to order items from vendor
Nolo contendere means:
a. no trial b. guilty c. innocent d. contested e. none of the other choices are correct
New business owners do not need to identify customers because they have already been identified by their competitors. All you have to do is copy your competitors.
Answer the following statement true (T) or false (F)