Royal Dutch Petro (RDP) is considering a new equipment purchasethat would replace some existing equipment. The old equipmenthas a Book Value (BV) of $400 thousand and RDP estimates that theequipment could be sold for ONLY $150 thousand. What is theAfter Tax Salvage Value (ATSV) of the old equipment that RDP shoulduse in their capital budgeting analysis? Assume the tax rate= T= 35%.

0, since the sale of old equipment has nothing to do withanalysis of new equipment being purchased

87.5 thousand

62.5 thousand

-250 thousand

237.5 thousand

Answer rating: 100% (QA)

32112 10 9 8 7 1 Q 21 28 1 I 1 2 3 4 5 1 W 6 7 8 9 10 11 12 13 Salvag... View the full answer