Calculate tax paid on gain on disposal

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Finance: After-Tax cash flow from selling the old asset

Question

Genetic Insights Co. purchases an asset for $16,528. This asset qualifies as a seven-year recovery asset under MACRS. The seven-year fixed depreciation percentages for years 1, 2, 3, 4, 5, and 6 are 14.29%, 24.49%, 17.49%, 12.49%, 8.93%, and 8.93%, respectively. Genetic Insights has a tax rate of 30%. The asset is sold at the end of six years for $4,022.

Calculate tax paid on gain on disposal.

Reference no: EM131406167

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