Jarrett Corporation has some slightly obsolete equipment that still has a book value of $260,000 on their balance sheet. They can sell the equipment now for $210,000, and they would recover $40,000 in working capital. Their tax rate is 21%. If they sell the equipment, what would be the terminal cash flow? $205,900 $111,100 $260,500 $228,900 $239,500

Intermediate Financial Management (MindTap Course List)
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ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
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Chapter6: Accounting For Financial Management
Section: Chapter Questions
Problem 10P: The Moore Corporation has operating income (EBIT) of 750,000. The companys depreciation expense is...
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Jarrett Corporation has some slightly obsolete equipment that still has a book value of $260,000 on their balance
sheet. They can sell the equipment now for $210,000, and they would recover $40,000 in working capital. Their tax
rate is 21%. If they sell the equipment, what would be the terminal cash flow?
$205,900
$111,100
$260,500
$228,900
$239,500
Transcribed Image Text:Jarrett Corporation has some slightly obsolete equipment that still has a book value of $260,000 on their balance sheet. They can sell the equipment now for $210,000, and they would recover $40,000 in working capital. Their tax rate is 21%. If they sell the equipment, what would be the terminal cash flow? $205,900 $111,100 $260,500 $228,900 $239,500
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