An asset used in a four-year project falls in the five-year MACRS class (MACRS T

Question

An asset used in a four-year project falls in the five-year MACRS class (MACRS Table) for tax purposes. The asset has an acquisition cost of $8,400,000 and will be sold for $1,880,000 at the end of the project.

If the tax rate is 35 percent, what is the aftertax salvage value of the asset? (Do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).)

An asset used in a four-year project falls in the five-year MACRS class (MACRS Table) for tax purposes. The asset has an acquisition cost of $8,400,000 and will be sold for $1,880,000 at the end of the project.

Explanation / Answer

After tax salvage value = asset value*(1-tax rate)+book value*(depreciation% year 5 and 6)*tax rate

=1880000*(1-0.35)+8400000*(0.1152+0.0576)*0.35

=

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.