The HaveAWonderfulHoliday Company just purchased some equipment that cost $225,000.The asset is in the MACRS 3-year class
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Question:
The HaveAWonderfulHoliday Company just purchased some equipment that cost $225,000.The asset is in the MACRS 3-year class for depreciation. So the depreciation rates will be .33, .45, .15, and .07 for years 1 through 4, respectively.
However it is expected that the asset will be sold in three years. The tax rate for the company is 21%. What is the after-tax salvage value at the end of YEAR 3 if the company receives:
a) $20,000 (at the end of year 3) for the asset?
b) $ 5,000 (at the end of year 3) for the asset?
Related Book For
Fundamentals of corporate finance
ISBN: 978-0470876442
2nd Edition
Authors: Robert Parrino, David S. Kidwell, Thomas W. Bates
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