An asset used in a four-year project falls in the five year MACRS class for tax purposes.
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Question:
An asset used in a four-year project falls in the five year MACRS class for tax purposes. The depreciation percentages of five year class as follows: year1: 20.00%, year2: 32.00%, year3: 19.20%, year4: 11.52%, year5: 11.52%, year6: 5.76%. The asset has an acquisition cost of $6,400,000 and will be sold for $1,530,000 at the end of the project. If the tax rate is 34%, what is the after-tax salvage value of the asset?
A. $1,385,812.80
B. $1,458,299.50
C. $1,579,233.70
D. $1,680,257.30
E. $1,792,255.40
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