Question

You purchased a machine for $1.04 milion three years ago and have been appling straight line depreciation to zero for a seven

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Answer #1
Particular CF Formula
Purchase Cost $ 10,40,000.00 Given
Useful Life 7 Given
Dep Per Anum $   1,48,571.43 Cost/ Useful Life
Dep for 3 Years $   4,45,714.29 Dep per anum * 3
Book Value $   5,94,285.71 Cost - Dep for 3 Years
Sale Value $   7,55,000.00 Given
Profit $   1,60,714.29 Sale Value - Book Value
Tax on Profit $      61,071.43 Profit * Tax Rate
Net proceeds from Sale $   6,93,928.57 Sale Value - Tax on Profit

Incremental CF is 693,928.57

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