Power Built Construction is considering whether to replace an existing bulldozer with a new model. If the new bulldozer is purchased, the existing bulldozer will be sold to another company for $85,000. The existing bulldozer has a book value equal to $100,000. What will be the net after tax cash flow that is generated from the disposal of the existing bulldozer? Power Built marginal tax rate is 35 percent. You must show the steps to arrive at the answer.

Leave a Reply

Your email address will not be published. Required fields are marked *