Question: An eight year project involves equipment costing $3,340,000 that will be depreciated using the five-year MACRS schedule. If the estimated pre-tax salvage value for the

An eight year project involves equipment costing $3,340,000 that will be depreciated using the five-year MACRS schedule. If the estimated pre-tax salvage value for the equipment at the end of the project's life is $567,800, what is the after-tax salvage value for the equipment? Assume a marginal tax rate of 34 percent.

$374,748

$502,162

-$3,785

$760,852

MACRS Depreciation Allowances
Property Class
Year	3-Year	5-Year	7-Year
1	33.33%	20.00%	14.29%
2	44.45	32.00	24.49
3	14.81	19.20	17.49
4	7.41	11.52	12.49
5		11.52	8.93
6		5.76	8.92
7			8.93
8			4.46

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!

A four year project involves equipment costing $3,050,000 that will be depreciated using the five- year MACRS schedule. If the estimated pre-tax salvage value for the equipment at the end of the...

MACRS Depreciation Allowances Property Class Year 3-Year 5-Year 7-Year 1 33.33% 20.00% 14.29% 2 44.45 32.00 24.49 3 14.81 19.20 17.49 4 7.41 11.52 12.49 5 11.52 8.93 6 5.76 8.92 7 8.93 8 4.46 An...

MACRS Depreciation Allowances Property Class 7-Year Year 5Year 3 Year 1 14.29 % 33.33% 20.00 % 2 24.49 44.45 32.00 14.81 19.20 17.49 7.41 11.52 12.49 5 11.52 8.93 6 5.76 8.92 8.93 7 4.46 8 3 pts...

MACRS Depreciation Allowances Property Class 3-Year 5-Year Year 7-Year 1 33.33% 20.00% 14.29% 2 44.45 32.00 24.49 3 14.81 17.49 19.20 11.52 4 7.41 12.49 11.52 5 6 8.93 8.92 5.76 7 8.93 8 4.46...

1. An eight year project involves equipment costing $2,290,000 that will be depreciated using the three-year MACRS schedule. If the estimated pre-tax salvage value for the equipment at the end of the...

3. Louie's Leisure Products is considering replacing a project which will require the purchase of $1.4 million in new equipment. The equipment will be depreciated straight-line to a zero book value...

A nine year project involves equipment costing $2,320,000 that will be depreciated using the five-year MACRS schedule. If the estimated pre-tax salvage value for the equipment at the end of the...

why do the NPV IRR and payback seem off for this problem? Inputs Taxrate: Variable cost/pound: Fixed cost/year X of NWC of annual sale: Cost of machine Aestoration Cost of the Farm * of Pretax...

Question 1 3 pts Winston Corporation is evaluating a new project that will require an increase in accounts receivable of $80,000, an increase in inventory of $250,000, and an increase in accounts...

What is the fundamental motivation behind portfolio theory? That is, what are people trying to achieve by investing in portfolios of stocks rather than in a few individual stocks or in debt? What...

Water flows from A to B with a deceleration of 2.1 ft/s2 along a horizontal streamline, as shown in (Figure 1)

if a corporation issues 5 0 0 0 shares of 5 $ per value common for $ 5 , 0 0 0 the entry would include a credit to

If there are 10 directors to be elected and a shareholder owns 250 shares, calculate the maximum number of votes that he or she can cast for a favorite candidate under each of the voting methods. a....

What are intangible assets? How are they influenced by human resource management practices?

Staffing, training, compensation, and performance management are important HRM functions. How can each of these functions help companies succeed in meeting the global challenge, the challenge of...

Many companies have dress codes that require men to wear suits and women to wear dresses. Is this discriminatory according to disparate treatment theory? Why?