A company installed its previous generation of computer chip manufacturing equipment 3 years ago. Some of the older equipment will become unnecessary when the company goes into production of its new product. The obsolete equipment, which oringinally costs $40 million, has depreciated straight-line over a tax life of 5 years, but can now be sold for $18 million. The firm's tax rate is 35%. What is the after tax cash flow from the sale of the equipment?

I know the annual depreciation is $4.4 million. But I am not sure where to go from there. I am unsure as to how to incorporate the 3 years ago fact, as well.

Your after-tax cash inflow will be the amount you receive after taxes and is the selling price of the old equipment * (1-35%). 1 is equal to 100% and 35% is your tax rate.