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International industries purchased a milling machine for


International Industries purchased a milling machine for $350,000. Several years have passed and the milling machine now has a book value of $75,000. Due to an industry slowdown, International has decided to sell their milling machine at an expected price of $135,000. Their marginal tax rate is 35% and their capital gains tax rate is 15%.

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Financial Management: International industries purchased a milling machine for
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The solution was asked for difference in capital gain and ordinary gain in International Industry along with calculation of tax liability on such gain. Reason being this is a gain which is achieved after selling of capital asset hence it will be categorized as Capital Gain and tax liability is created on capital gain amount with the rate of capital gain tax which is 15%. This solution is solved in Microsoft office excel sheet.

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