Churchill Ltd. purchases an asset for $150,000. This asset qualifies as a five-year recovery asset

Churchill Ltd. purchases an asset for $150,000. This asset qualifies as a five-year recovery asset under MACRS with the fixed depreciation percentages as follows: year 1 = 20.00%; year 2 = 32.00%; year 3 = 19.20%; year 4 = 11.52%. Churchill has a tax rate of 35%. If the asset is sold at the end of four years for $40,000, what is the cash flow from disposal? 10
A) $36,089
B) $35,072
C) $34,931
D) $33,678

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