A company is evaluating a new 4-year project. The equipment necessary for the project will cost $2,950,000 and can be sold for $660,000 at the end of the project. The asset the 5-year MACRS class. The depreciation percentage each year is 20.00 percent, 32.00 percent, 19.20 percent, 11.52 percent and 11.52 percent, respectively. The company's tax rate is 35 percent. What is the aftertax salvage value of the equipment?

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Q: A company is evaluating a new 4-year project. The equipment necessary for the project will cos…

A: Aftertax salvage value refers to the amount of tax to be deducted from the sale price after the life…

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A: Depreciation per year = ($790,000 - $255,000) / 5.= $107,000.

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Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.