Company J bought a piece of equipment for $200,000. This equipment has a useful life of 10

Question:

Company J bought a piece of equipment for $200,000. This equipment has a useful life of 10 years and a of $40,000. The company has been using the seven-year MACRS property class to depreciate the asset for tax purposes. At the end of year 4, the company sold the equipment for $120,000. The tax rate is 40%. What is the net proceeds (after tax) from the sale of the equipment? Salvage Value
Salvage value is the estimated book value of an asset after depreciation is complete, based on what a company expects to receive in exchange for the asset at the end of its useful life. As such, an asset’s estimated salvage value is an important...