Pear Orchards is evaluating a new project that will require equipment of $221,000. 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 $48,900. However, the company plans to keep the equipment for a different project in another state. The tax rate is 24 percent. What aftertax salvage value should the company use when evaluating the current project? Multiple Choice $51,471 $48,900 О $46,329 $38,189 $0
Pear Orchards is evaluating a new project that will require equipment of $221,000. 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 $48,900. However, the company plans to keep the equipment for a different project in another state. The tax rate is 24 percent. What aftertax salvage value should the company use when evaluating the current project? Multiple Choice $51,471 $48,900 О $46,329 $38,189 $0
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:Pear Orchards is evaluating a new project that will require equipment of $221,000. 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 $48,900. However, the company plans to keep the equipment for a
different project in another state. The tax rate is 24 percent. What aftertax salvage value should the company use when evaluating the current project?
Multiple Choice
$51,471
$48,900
О
$46,329
$38,189
$0
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