Consider a project with an initial asset cost of $168,000 with depreciation of that asset set as straight-line to zero over seven years. Ignore bonus depreciation. At the end of the project's four-year life the asset can be sold for $65,000. Use a combined federal and state tax rate of 24 percent. What is the aftertax salvage value?
Consider a project with an initial asset cost of $168,000 with depreciation of that asset set as straight-line to zero over seven years. Ignore bonus depreciation. At the end of the project's four-year life the asset can be sold for $65,000. Use a combined federal and state tax rate of 24 percent. What is the 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
Section: Chapter Questions
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Transcribed Image Text:Consider a project with an initial asset cost of $168,000 with depreciation of
that asset set as straight-line to zero over seven years. Ignore bonus
depreciation. At the end of the project's four-year life the asset can be sold
for $65,000. Use a combined federal and state tax rate of 24 percent. What is
the aftertax salvage value?
$68,100
$65,500
$66,050
$72,440
$62,550
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