A piece of equipment was purchased for $1, 200 and depreciated on a straight-line basis to $140 over a useful life of 10 years. After 5 years of use, the equipment was sold for $650. If the firm's tax rate is 28.0%, a) How much is the annual depreciation expense? (Round to 2 decimal places) b) What is the after-tax salvage cash flow? $ (Round to 2 decimal places)
A piece of equipment was purchased for $1, 200 and depreciated on a straight-line basis to $140 over a useful life of 10 years. After 5 years of use, the equipment was sold for $650. If the firm's tax rate is 28.0%, a) How much is the annual depreciation expense? (Round to 2 decimal places) b) What is the after-tax salvage cash flow? $ (Round to 2 decimal places)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:A piece of equipment was purchased for $1, 200 and depreciated on a straight-line basis to $140 over a useful life of 10 years. After 5 years of use, the
equipment was sold for $650. If the firm's tax rate is 28.0%,
a) How much is the annual depreciation expense?
$
(Round to 2 decimal places)
b) What is the after-tax salvage cash flow?
$
(Round to 2 decimal places)
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