Essay
Krugman Construction Company is considering the purchase of a new crane at a cost of $600,000.If the new crane is purchased,the old crane will be sold.It was purchased 5 years ago at a cost of $450,000.To date,the company has taken $200,000 in depreciation on the old crane.Compute the cash flow that would be realised from selling the old crane under each of the following scenarios.Krugman's marginal tax rate is 30%.
a.The crane is sold for $200,000
b.The crane is sold for $250,000
c.The crane is sold for $300,000
Correct Answer:
Verified
Correct Answer:
Verified
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