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A firm has a machine it can sell for $40,000. The book value of the machine is currently $20,000. If the firm sells the machine, what are the net proceed from the sale? Assume that the tax rate is 40%. Round to the nearest penny. Do not include a dollar sign in your answer.

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Answer:

The answer will be 12,000 dollars

Explanation:

The company will have to pay taxes for the diference between the sales value and the book value

so ( 40,000 - 20,000 ) * 40% = 20,000 * 20% = 8,000 tax income

total proceed 20,000 gross profit - 8,000 tax income    = 12,000 net proceed

The cost paid for the bond or debt purchase is called book value while, when the whole volume of the assets is sold during the base period is called sales value.

The answer is 12,000 dollars.

This can be calculated by:

The organization will have to pay expenses for the difference between the sales and the book value.

Given,

  • The amount at which the company can sell = $40,000

  • The book value of the machine = $ 20,000

  • The Tax rate = 40%

= 40000 - 20000  ×  40%

= 20000 ×  40%

= 8000 tax income.

Total proceed 20,000 (gross profit) - 8,000 (tax income)  

= 12,000 net proceed

Therefore 12,000 is the net proceed from the sale.

To learn more about book and sale value follow the link:

https://brainly.com/question/20436978

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