Pear Orchards is evaluating a new project that will require equi The equipment will be depreciated on a 5-year MACRS schedule. The annual depreciation percentages are 20.00 percent, 32.00 percent, 19.20 percent, 11.52 percent, and 11.52 percent, respectively. The company plans to shut down the project after 4 years. At that time, the equipment could be sold for $69,700. However, the company plans to keep the equipment for a different project in another state. The tax rate is 25 percent. What aftertax salvage value should the company use when evaluating the current project? $0 $63,205 $69,700 $76,195 $42.710 G
Pear Orchards is evaluating a new project that will require equi The equipment will be depreciated on a 5-year MACRS schedule. The annual depreciation percentages are 20.00 percent, 32.00 percent, 19.20 percent, 11.52 percent, and 11.52 percent, respectively. The company plans to shut down the project after 4 years. At that time, the equipment could be sold for $69,700. However, the company plans to keep the equipment for a different project in another state. The tax rate is 25 percent. What aftertax salvage value should the company use when evaluating the current project? $0 $63,205 $69,700 $76,195 $42.710 G
Chapter9: Capital Budgeting And Cash Flow Analysis
Section: Chapter Questions
Problem 17P
Related questions
Question
![Pear Orchards is evaluating a new project that will require equipment of
The equipment will be depreciated on a 5-year MACRS schedule. The annual
depreciation percentages are 20.00 percent, 32.00 percent, 19.20 percent, 11.52
percent, and 11.52 percent, respectively. The company plans to shut down the
project after 4 years. At that time, the equipment could be sold for $69,700.
However, the company plans to keep the equipment for a different project in another
state. The tax rate is 25 percent. What aftertax salvage value should the company
use when evaluating the current project?
$0
$63,205
$69,700
$76,195
$43,718](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F22156c6e-a823-4962-a1e1-1a515f05e941%2F13116b31-5a56-4cc8-9c21-e2b80033da60%2F2up5pkd_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Pear Orchards is evaluating a new project that will require equipment of
The equipment will be depreciated on a 5-year MACRS schedule. The annual
depreciation percentages are 20.00 percent, 32.00 percent, 19.20 percent, 11.52
percent, and 11.52 percent, respectively. The company plans to shut down the
project after 4 years. At that time, the equipment could be sold for $69,700.
However, the company plans to keep the equipment for a different project in another
state. The tax rate is 25 percent. What aftertax salvage value should the company
use when evaluating the current project?
$0
$63,205
$69,700
$76,195
$43,718
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