Brummitt Corporation, is evaluating a new 4-year project. The equipment necessary for the project will cost $3,000,000 and can be sold for $321,000 at the end of the project. The asset is in 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 40 percent. What is the aftertax salvage value of the equipment? Multiple Choice $261,720 $321,000 $399,960 ○ $192,600 $242,040
Brummitt Corporation, is evaluating a new 4-year project. The equipment necessary for the project will cost $3,000,000 and can be sold for $321,000 at the end of the project. The asset is in 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 40 percent. What is the aftertax salvage value of the equipment? Multiple Choice $261,720 $321,000 $399,960 ○ $192,600 $242,040
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
Section: Chapter Questions
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Transcribed Image Text:Brummitt Corporation, is evaluating a new 4-year project. The equipment necessary for the project will cost $3,000,000 and can be sold for $321,000 at the end of the
project. The asset is in 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 40 percent. What is the aftertax salvage value of the equipment?
Multiple Choice
$261,720
$321,000
$399,960
○ $192,600
$242,040
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