Problem:
Suppose you sell a fixed asset for $125,000 when it's book value is $139,000.
Required:
Question: If your company's marginal tax rate is 30%, what will be the effect on cash flows of this sale (i.e., what will be the after-tax free cash flow of this sale)?
- $9,800
- $14,000
- $111,300
- $129,200
Note: Please provide equation and explain comprehensively and give step by step solution.