An asset used in a four-year project falls in the five-year MACRS class (MACRS schedule) for tax purposes. The asset has an acquisition cost of $8,000,000 and will be sold for $1,940,000 at the end of the project. If the tax rate is 22 percent, what is the aftertax salvage value of the asset? Note: Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32. Aftertax salvage value

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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Table 9.7 Modified ACRS depreciation allowances
Year
12345678
4
3-Year
Property Class
33.33%
44.45
14.81
7.41
5-Year
20.00%
32.00
19.20
11.52
11.52
5.76
7-Year
14.29%
24.49
17.49
12.49
8.93
8.92
8.93
4.46
Transcribed Image Text:Table 9.7 Modified ACRS depreciation allowances Year 12345678 4 3-Year Property Class 33.33% 44.45 14.81 7.41 5-Year 20.00% 32.00 19.20 11.52 11.52 5.76 7-Year 14.29% 24.49 17.49 12.49 8.93 8.92 8.93 4.46
An asset used in a four-year project falls in the five-year MACRS class (MACRS schedule) for tax purposes. The asset has an acquisition
cost of $8,000,000 and will be sold for $1,940,000 at the end of the project. If the tax rate is 22 percent, what is the aftertax salvage
value of the asset?
Note: Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.
Aftertax salvage value
Transcribed Image Text:An asset used in a four-year project falls in the five-year MACRS class (MACRS schedule) for tax purposes. The asset has an acquisition cost of $8,000,000 and will be sold for $1,940,000 at the end of the project. If the tax rate is 22 percent, what is the aftertax salvage value of the asset? Note: Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32. Aftertax salvage value
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