Voxland Industries purchased a computer for $10,000, which it will depreciate straight line over five years to a $1,000 salvage value The computer will then be sold at that price The companys marginal tax rate is 40 Calculate the cash flows associated with the computer from its purchase to its even...

Voxland Industries purchased a computer for $10,000, which it will depreciate straight line over five years to

Question:

Voxland Industries purchased a computer for $10,000, which it will depreciate straight line over five years to a $1,000 . The computer will then be sold at that price. The company’s marginal tax rate is 40%. Calculate the cash flows associated with the computer from its purchase to its eventual sale including the years in between.

Salvage Value
Salvage value is the estimated book value of an asset after depreciation is complete, based on what a company expects to receive in exchange for the asset at the end of its useful life. As such, an asset’s estimated salvage value is an important...