Firm X is considering the replacement of an old machine with one that has a purchase price of $85,000. The current market value of the old machine is $23,000 but the book value is $37,000. The firm's combined tax rate is 34%. What is the net cash outflow for the new machine after considering the sale of the old machine? Disregard the effect of depreciation of the new machine if acquired. Multiple Choice O $57,240 $53,840 $63.110 $69,590

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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Firm X is considering the replacement of an old machine with one that has a purchase price of $85,000. The current market value of the old machine is $23,000
but the book value is $37,000. The firm's combined tax rate is 34%, What is the net cash outflow for the new machine after considering the sale of the old machine?
Disregard the effect of depreciation of the new machine if acquired.
Multiple Choice
$57,240
$53,840
$63.110
$69,590
Transcribed Image Text:Firm X is considering the replacement of an old machine with one that has a purchase price of $85,000. The current market value of the old machine is $23,000 but the book value is $37,000. The firm's combined tax rate is 34%, What is the net cash outflow for the new machine after considering the sale of the old machine? Disregard the effect of depreciation of the new machine if acquired. Multiple Choice $57,240 $53,840 $63.110 $69,590
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