Krugman Construction Company is considering the purchase of a new crane at a cost of $600,000.If the new crane is purchased the old crane will be sold.It was purchased five years ago at a cost of $450,000.To date, the company has taken $200,000 in depreciation on the old crane.Calculate the cash flow that would be realized from selling the old crane under each of the following scenarios.Krugman's marginal tax rate is 30%.
a.The crane is sold for $200,000
b.The crane is sold for $250,000
c.The crane is sold for $300,000

Question

Quizplus · Accepted Answer

The Answer of Krugman Construction Company is considering the purchase of a new crane at a cost of $600,000.If the new crane is purchased the old crane will be sold.It was purchased five years ago at a cost of $450,000.To date, the company has taken $200,000 in depreciation on the old crane.Calculate the cash flow that would be realized from selling the old crane under each of the following scenarios.Krugman's marginal tax rate is 30%.
a.The crane is sold for $200,000
b.The crane is sold for $250,000
c.The crane is sold for $300,000

Krugman Construction Company Is Considering the Purchase of a New