You purchased a machine for $1.1 million three years ago and have been applying straight-line depreciation to zero for a seven-year life. Your tax rate is 38%. If you sell the machine today (after three years of depreciation) for $700,000, what is your incremental cash flow from selling the machine?
Cost of machine= $1,100,000
Less: Salvage value=$0
Depreciation Amount= $1,100,000
Useful Life= 7 years
Depreciation per annum= $157,142.86
Book value at the end of 3rd