James Company has an asset that cost $5,000 and currently has accumulated depreciation of $2,000. Suppose the firm sold the asset for $2,500 and is subject to a 30% income tax rate.
The net after-tax cash flow of the disposal is:
A) $2,100.
B) $2,350.
C) $2,500.
D) $2,650.
E) None of the other answers are correct.
Correct Answer:
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