problem:
Firm X is considering the replacement of an old machine with one that has a purchase price of $70,000. The current market value of the old machine is $38,000 but the book value is $32,000. The firm's tax rate for ordinary income is 30%.
Required:
Question 1) What is the net cash outflow for the new machine after considering the sale of the old machine? Solve the problem and show all work.