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Sagot :
Cash outflow from selling the equipment is $13559.
What is cash inflow or outflow?
Cash influx is the term used to describe the money that enters a firm. It might originate from sales, investments, or financing. A cash inflow is the opposite of a cash outflow since it involves money coming into a business. A company's potential to add value for shareholders is dependent on its ability to generate positive cash flows.
At the end of the third year, the equipment's book value
= 88700-(88700×0.95)
=4435
Loan on sale = 4435-16600
=(-12165)
Tax shield on loss on sale = -12165×0.25
=(-3041.25)
Cash outflow from selling the equipment=salvage +Tax shield
=16600+(-3041.25)
=$13558.75
=$13559
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