Firm AAA is considering investing $15,000 for machinery for a project. The project will last for 10 years. The company uses a straight-line depreciation on the machinery over the 10 years with annual depreciation of $1,200 per year. The machinery is expected to have a salvage value at the end of year 10 of $2,500 (i.e., may be sold for a market price of $2,500). 

Calculate the after-tax salvage value. Assume capital gain tax rate of 35%.

Answer rating: 100% (QA)

To calculate the aftertax salvage value youll first need to determine the capital gain on the sale o... View the full answer