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eight-year tax life. e project, the ass

eight-year tax life. e project, the ass

Essentials Of Investments
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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Consider an asset that costs $735,000 and is depreciated straight-line to zero over its eight-year tax life. The asset is to be used in a five-year project; at the end of the project, the asset can be sold for $165,000. If the relevant tax rate is 25 percent, what is the aftertax cash flow from the sale of this asset? (Do not round intermediate calculations.) Aftertax salvage value
Transcribed Image Text:Consider an asset that costs $735,000 and is depreciated straight-line to zero over its eight-year tax life. The asset is to be used in a five-year project; at the end of the project, the asset can be sold for $165,000. If the relevant tax rate is 25 percent, what is the aftertax cash flow from the sale of this asset? (Do not round intermediate calculations.) Aftertax salvage value
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