An asset used in a 4-year project falls in the 5-year MACRS class for tax purposes. The asset has an acquisition cost of $8,900,000 and will be sold for $2,440,000 at the end of the project. If the tax rate is 23 percent, what is the aftertax salvage value of the asset? (MACRS schedule) (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) Aftertax salvage value $ 2,232,149

Essentials Of Investments
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Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
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Chapter1: Investments: Background And Issues
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Problem 6-10 Calculating Salvage Value
An asset used in a 4-year project falls in the 5-year MACRS class for tax purposes. The
asset has an acquisition cost of $8,900,000 and will be sold for $2,440,000 at the end
of the project. If the tax rate is 23 percent, what is the aftertax salvage value of the
asset? (MACRS schedule) (Do not round intermediate calculations and round your
answer to the nearest whole number, e.g., 32.)
Aftertax salvage value
$
2,232,149
Transcribed Image Text:Problem 6-10 Calculating Salvage Value An asset used in a 4-year project falls in the 5-year MACRS class for tax purposes. The asset has an acquisition cost of $8,900,000 and will be sold for $2,440,000 at the end of the project. If the tax rate is 23 percent, what is the aftertax salvage value of the asset? (MACRS schedule) (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) Aftertax salvage value $ 2,232,149
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