What is the cash flow resulting from disposal of the equipment at the end of 2 years?

Calculate the cash flow generated by the disposal of equipment after two years. Subtract any costs associated with the transaction, such as advertising expenses or legal fees. To determine if a transaction was profitable or not, the remaining amount will be compared with the initial purchase price.

For example, if the original purchase cost was $50,000 and all associated costs total $5,000, then after selling the equipment for $60,000 there would be a net gain of $5,000 ($60,000 – $55,000). This can also be expressed as a percentage return on investment (ROI) which in this case would be 10% (($5,000/$50,00)*100). The calculation can help you make future decisions when purchasing or disposing similar assets.

It is also important to take into account other factors, such as the market conditions that could influence how much an asset will sell for. Taxes may also be applicable, such as capital gains taxes. In the end, understanding cash flows that may result from asset disposition can inform good financial decisions and ensure long-term profit.