Question: Pear Orchards is evaluating a new project that will require equipment of ( $ 253,00 U ). The equipment will be depreciated on a 5

Pear Orchards is evaluating a new project that will require equipment of \$ \\$ 253,00 U \$. The equipment will be depreciated on a 5 -year MACRS schedule. The annual depreciation percentages are 20.00 percent, 32.00 percent, 19.20 percent, 11.52 percent, and 11.52 percent, respectively. The company plans to shut down the project after 4 years. At that time, the equipment could be sold for \$ \\$ 69,700 \$. However, the company plans to keep the equipment for a different project in another state. The tax rate is 25 percent. What aftertax salvage value should the company use when evaluating the current project? \$ \\$ 0 \$ \$ \\$ 63,205 \$ \$ \\$ 69,700 \$ \$ \\$ 76,195 \$ \$ \\$ 43.718 \$

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!

Pear Orchards is evaluating a new project that will require equipment of $ 2 2 3 , 0 0 0 . The equipment will be depreciated on a 5 - year MACRS schedule. The annual depreciation percentages are 2 0...

Pear Orchards is evaluating a new project that will require equipment of $217,000. The equipment will be depreciated on a 5 -year MaCRS schedule. The annual depreciation percentages are 20.00...

Pear Orchards is evaluating a new project that will require equipment of $223,000. The equipment will be depreciated on a 5 year MACRS schedule. The annual depreciation percentages are 20.00 percent,...

Pear Orchards is evaluating a new project that will require equipment of $249,000. The equipment will be depreciated on a 5 . year MACRS schedule. The annual depreciation percentages are 20.00...

Pear orchards is evaluating a new project that will require equipment of 249000. The equipment will be depreciated on a five year MACRS schedule. the annual depreciation percentages are 20%, 32%,...

Pear Orchards is evaluating a new project that will require equipment of $229,000. The equipment will be depreciated on a 5 -year MACRS schedule. Th annual depreciation percentages are 20.00 percent,...

Pear Orchards is evaluating a new project that will require equipment of $227,000. The equipment will be depreciated on a 5-year MACRS schedule. The annual depreciation percentages are 20.00 percent,...

Pear Orchards is evaluating a new project that will require equipment of $261,000. The equipment will be depreciated on a 5-year MACRS schedule. The annual depreciation percentages are 20.00 percent,...

Pear Orchards is evaluating a new project that will require equipment of $225,000. The equipment will be depreciated on a 5-year MACRS schedule. The annual depreciation percentages are 20.00 percent,...

Pear Orchards is evaluating a new project that will require equipment of $217,000. The equipment will be depreciated on a 5-year MACRS schedule. The annual depreciation percentages are 20.00 percent,...

Evaluate the effectiveness of two PPC ads with these Google search terms with the following ["MEXICO VACATION" and "BUSINESS BANK ACCOUNT"]: Creativity Message Ability to reach the intended target...

Assuming that Project Rare/Project Earths would be financed entirely by an equity raising, what would be an appropriate discount rate to use and why? Your colleague from the equity research...

Rowan and Finley have been in a polyamorous relationship with two other people for 5 years. Recently, Rowan discovered that Finley violated the rules of their polyamorous relationship and had sex...

A company is preparing completing their Cash Budget. The following data has been prepared for cash receipts and payments. January February March Cash receipts $1,061,200 $1,182,400 $1,091,700 Cash...