Assume that ABC company wants to acquire a new equipment at an initial price of $$1000$ with $10$ years useful life. The equipment's value will be depreciated on a straight$-$line basis down to a book value of at the end of $10($th$)$ year. However the firm can sell it at $$250$ residual value at the end of $8($th$)$ year. Marginal tax rate$=40\%.$ What is the after tax residual value at the end of $8($th$)$ year? 

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The aftertax residual value at the end of the 8th year for the equipment acquired by ABC c... View the full answer