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The PbP Company purchased a Warm n' Cook heat treating furnace so that it can properly heat treat the parts for its high performance axles. This furnace cost $620,000 and was purchased on June 12, 2007. Delivery and assembly charges were $40,000 and the company placed this furnace into service on October 23, 2007. The company used this furnace until June 10, 2012 when it was sold for $240,000. However, the PbP Company had to pay $10,000 to disassemble and ship the furnace to the new owner. What is the net cash flow after tax that will result from selling this furnace in the year 2012? The capital gains tax rate for the company is 18% in 2012 and this furnace is classified with a 10 year class life and is depreciated using the straight line schedule since this is foreign equipment. 

Microeconomics, Economics

  • Category:- Microeconomics
  • Reference No.:- M941171

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