Pear Orchards is evaluating a new project that will require equipment of $237,000. The equipment will be
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Pear Orchards is evaluating a new project that will require equipment of $237,000. 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 $59,300. However, the company plans to keep the equipment for a different project in another state. The tax rate is 40 percent. What after tax salvage value should the company use when evaluating the current project?
Related Book For
Fundamentals of Corporate Finance
ISBN: 978-0077861629
8th edition
Authors: Richard Brealey, Stewart Myers, Alan Marcus
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