In December of 20×4, Memphis Plastics sold a forklift for $9,255. The machine was purchased in 20×1 for $50,000. Since then $38,845 in depreciation has been recorded on the forklift. Required: 1. What was the forklift’s book value at the time of sale? 2. Compute the gain or loss on the sale. 3. Determine the after-tax cash flow at the time the forklift was sold. The firm’s tax rate is 45 percent.

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