Question: A company is evaluating a new 4 year project. The equipment necessary for the project will cost $3,850,000 and can be sold for $750,000 at

A company is evaluating a new 4 year project. The equipment necessary for the project will cost $3,850,000 and can be sold for $750,000 at the end of the project. The asset is in the 5 -year MACRS class. The depreclation percentage each year is 20.00 percent, 32.00 percent, 19.20 percent, 11.52 percent, and 11.52 percent, respectively. The company's tax rate is 21 percent. What is the oftertax salvage value of the equipment? (Hint. First find the book value and compare to the salvage value to identify tax implication. Use the aftertax salvage equation for assistance.)

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

The $41 billion dollar firm Uber Technology, Inc., is unsettling the traditional taxi business. In over 40 countries and 240 markets around the world, Uber and similar companies are challenging the...

A company is evaluating a new 4 -year project. The equipment necessary for the project will cost $3,450,000 and can be sold for $710,000 at the end of the project. The asset is in the 5 -year MACRS...

A company is evaluating a new 4 -year project. The equipment necessary for the project will cost $3,200,000 and can be sold for 5640,000 at the end of the project. The asset is in the 5 -year MACRS...

A company is evaluating a new 4 -year project. The equipment necessary for the project will cost $3,150,000 and can be sold for $680,000 at the end of the project. The asset is in the 5-year MACRS...

a company is evaluating a new 4 year project. the equipment necessary for the projecy will cost $3250000 and can be sold for $645000 at the end of the project

Bnummitt Corporation is evaluating a new 4 year project. The equipment necessary for the project will cost $2.650,000 and can be sold for 5307,000 at the end of the project. The asset is in the 5...

Brummitt Corporation, is evaluating a new 4 year project. The equipment necessary for the project will cost $2,750,000 and can be sold for $311,000 at the end of the project. The asset is in the 5...

Bull \& Bear Corp., is evaluating a new 5 -year project. The equipment necessary for the project will cost $656,000 and can be sold for $115,000 at the end of the project. The asset is in the 5-year...

7. Your company is considering a new, 4 year project. The budget analyst has given you the proforma income statement, shown below. Additional Assumptions: $120,000 of Fixed Assets (Equipment)...

Please help with as much as you can. Thank so much! 20) If you earn an annual interest rate of 8.9 percent, how many years will it take to double your money? A) 7.11 years B) 8.13 years C) 6.50 years...

Aria Acoustics, Inc. (AAI), projects unit sales for a new seven-octave voice emulation implant as follows: Year Unit Sales 1 74,000 2 87,000 3 101,000 4 96,000 5 77,000 Production of the implants...

Consider a 12-cm-diameter tubular combustion chamber. Air enters the tube at 500 K, 400 kPa, and 70 m/s. Fuel with a heating value of 39,000 kJ/kg is burned by spraying it into the air. If the exit...

_____ is a solvency metric and is computed as total assets minus total liabilities. A). Ratio of fixed assets to long-term liabilities. B). Debt ratio. C). Asset turnover. D). Net asset.

Ivanhee Shoe 5 hores management focecasts that it will sel 8 2 0 0 pairs of shoes neat year. The firm buys its shoes for $ 5 0 per pair from the wholesaler and sells them for $ 7 5 per pals. It the...

2 Question 18 Which of the following statements about net working capital (NWC) is correct? O As NWC decreases, potential liquidity increases. NWC is positive for all forms. NWC excludes inventory,...