Consider an asset that costs $685,000 and is depreciated straight-line to zero over its seven-year tax...

 

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Consider an asset that costs $685,000 and is depreciated straight-line to zero over its seven-year tax life. The asset is to be used in a five-year project; at the end of the project, the asset can be sold for $145,000. If the relevant tax rate is 25 percent, what is the aftertax cash flow from the sale of this asset? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) Aftertax salvage value Consider an asset that costs $685,000 and is depreciated straight-line to zero over its seven-year tax life. The asset is to be used in a five-year project; at the end of the project, the asset can be sold for $145,000. If the relevant tax rate is 25 percent, what is the aftertax cash flow from the sale of this asset? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) Aftertax salvage value

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To calculate the aftertax salvage value we need to consider the tax implications of selling the asse... View the full answer