Old machine on the initial outlay


Nargo Inc. Wants to replace a 7 year old machine with a new machine that is more efficient. The old machine cost $50,000 when new and has a current book value of $10,000. Margo can sell the machine to a foreign buyer for $12,000. Margo's tax rate is 30%. The effect of the sale of the old machine on the initial outlay for the new machine is ________

[$12,600]

[$11,400]

[$8,400]

$0

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Business Management: Old machine on the initial outlay
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