

McqMate
Q. |
Regal Industries is replacing a grinder purchased 5 years ago for $15,000 with a new one costing $25,000 cash. The original grinder is being depreciated on a straight-line basis over 15 years to a zero-salvage value. Regal will sell this old equipment to a third party for $6,000 cash. The new equipment will be depreciated on a straight-line basis over 10 years to a zero-salvage value. Assuming a 40% marginal tax rate, Regal’s net cash investment at the time of purchase if the old grinder is sold and the new one purchased is |
A. | $19000 |
B. | $15000 |
C. | $17400 |
D. | $25000 |
Answer» C. $17400 |
View all MCQs in
Management AccountingNo comments yet