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24 September, 13:06

A firm has a machine it can sell for $40,000. The book value of the machine is currently $20,000. If the firm sells the machine, what are the net proceed from the sale? Assume that the tax rate is 40%. Round to the nearest penny. Do not include a dollar sign in your answer.

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  1. 24 September, 17:02
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    The answer will be 12,000 dollars

    Explanation:

    The company will have to pay taxes for the diference between the sales value and the book value

    so (40,000 - 20,000) * 40% = 20,000 * 20% = 8,000 tax income

    total proceed 20,000 gross profit - 8,000 tax income = 12,000 net proceed
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