Question: Hilden Co. is considering a five-year project that will require $750,000 for new fixed assets that will be depreciated straight-line to a zero book value

Hilden Co. is considering a five-year project that will require $750,000

Hilden Co. is considering a five-year project that will require $750,000 for new fixed assets that will be depreciated straight-line to a zero book value over 5 years. No bonus depreciation will be taken. At the end of the project, the fixed assets can be sold for $300,000. The project is expected to generate annual sales of $700,000 with costs of $350,000. The tax rate is 21 percent and the required rate of return is 12.5 percent. What is the amount of the after-tax salvage value? A. $276,500 B. $431,462 C. $632,000 D. $237,000 O E. $553,000

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