After-tax cash flow from selling it

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Reference no: EM138714

Q1. The Jones Company has just completed the third year of a five-year MACRS recovery period for a piece of equipment it originally purchased for $300,000.

a. What is the book value of the equipment?

b. If Jones sells the equipment today for $180,000 and its tax rate is 35%, what is the after-tax cash flow from selling it?

Q2. Suppose the federal government runs a $200 billion deficit in year 1 that increases the public debt from $2,000 billion to $2,200 billion by year's end. During year 1 the price level rises by 10 percent. What is the "real" deficit in year 1

Reference no: EM138714

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