Burry Inc. has provided the following data to be used in evaluating a proposed i

Question

Burry Inc. has provided the following data to be used in evaluating a proposed investment project: For tax purposes, the entire initial investment without any reduction for salvage value will be depreciated over 5 years. The company uses a discount rate of 11%. When computing the net present value of the project, what is the after-tax cash flow from the salvage value in the final year? A) $22,500 B) $75,000 C) $52,500 D) $0 Burry Inc. has provided the following data to be used in evaluating a proposed investment project: For tax purposes, the entire initial investment without any reduction for salvage value will be depreciated over 5 years. The company uses a discount rate of 11%. When computing the net present value of the project, what is the after-tax cash flow from the salvage value in the final year? A) $22,500 B) $75,000 C) $52,500 D) $0

Explanation / Answer

C) $52,500

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