Compute the after-tax salvage value from the following data assuming the equipment is only 50% depreciated. Equipments

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Compute the after-tax salvage value from the following data assuming the equipment is only 50% depreciated.

Equipment’s original cost $29,000,000

Depreciation (100%) 29,000,000

Book value $ 0

Gain on sale = $8,000,000 – $0 = $8,000,000.

Tax on gain = $8,000,000(0.25) = $2,000,000.

AT salvage value = $8,000,000 – $2,000,000 = $6,000,000

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Fundamentals Of Corporate Finance

ISBN: 9781265553609

13th Edition

Authors: Stephen Ross, Randolph Westerfield, Bradford Jordan

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Posted Date: Feb 15, 2023 12:19 AM

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Compute the after-tax salvage value from the following data assuming the equipment is only 50% depreciated. Equipments

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Fundamentals Of Corporate Finance

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