An asset is used in a four year project falls in the five year MACRS class for tax purposes The asset has an acquisition cost of $8,600,000 and will be sold for $1,890,000 at the end of the project If the tax rate is 35 percent, what is the after tax salvage value of the asset 5 Consider the following cash flows on two mutually exclusive projects Year Project A Project B 0 54,000 64,000 1 26,000 29,000 2 32,000 38,000 3 19,000 23,000 The cash flows of Project A are expressed in real terms which those of Project B are expressed in nominal terms The appropriate nominal discount rate is 11 percent and the inflation rate is 4 percent Which project should you choose Please show step by step calculations so I can see how you obtained the answer

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Question: . An asset is used in a four-year project falls in the five-year MACRS class for tax purposes. The asset has an acquisition cost of

. An asset is used in a four-year project falls in the five-year MACRS class for tax purposes. The asset has an acquisition cost of $8,600,000 and will be sold for $1,890,000 at the end of the project. If the tax rate is 35 percent, what is the after-tax salvage value of the asset?

5. Consider the following cash flows on two mutually exclusive projects.

Year	Project A	Project B
0	-54,000	-64,000
1	26,000	29,000
2	32,000	38,000
3	19,000	23,000

The cash flows of Project A are expressed in real terms which those of Project B are expressed in nominal terms. The appropriate nominal discount rate is 11 percent and the inflation rate is 4 percent. Which project should you choose?

Please show step by step calculations so I can see how you obtained the answer.

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