Question: 7) Your company is evaluating a new project that will require the purchase of an asset for $22,000 installed. The asset will be depreciated using

7) Your company is evaluating a new project that will require the purchase of an asset for $22,000 installed. The asset will be depreciated using 5-year MACRS. The asset will be operated for 6 years and expected to have a market value of $6,000 at the end of 6 years. The applicable tax rate is 30% and the cost of capital is 12% a) b) Calculate the after tax salvage for the asset at the end of 6 years. Calculate the gain or (loss) from the sale of the asset at the end of 6 years? (And indicate whether it is a gain or a loss. Calculate the tax consequences from the sale of the asset in 6 years and indicate whether it is a tax liability or tax saving. c)

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