I need help with this. An asset used in a four-year project falls in the five-year MACRS class for tax purposes. The asset has an acquisition cost of $4.9million and will be sold for $1.6 million at the end of the project. If the tax rate is 21 percent, what is the aftertax salvage value of theasset? Refer to Table 10.7.Note: Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to the nearestwhole number, e.g., 1,234,567.Aftertax salvage value Property ClassYear Three-YearFive-YearFive-YearSeven-Year33.33%20.00%14.29%44.4532.0024.4914.8119.2017.497.4111.5212.4911.528.935.768.928.934.461234567∞8

Step 5: Calculate Tax on Gain Tax on Gain=Gain ×Tax Rate Tax on Gain=0.75528×0.21=0.1586088million…

Answered: An asset used in a four-year project…

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter19: Capital Investment

Section: Chapter Questions

Problem 18E

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