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QUESTION
Garrison Corporation is considering the replacement of an old machine that is currently being used. The old machine has a book value of $28,000.
Garrison Corporation is considering the replacement of an old machine that is currently being used. The old machine has a book value of $28,000. If Garrison decides to replace the old machine, Picco Company has offered to purchase it for $60,000 on the replacement date. Garrison has a tax rate of 40%. What is the after-tax cash flow associated with the salvage of the old machine?
