Power Manufacturing has equipment that it purchased 6 years ago for $2,500,000. The equipment was used for a project that was intended to last for 8 years and was being depreciated over the life of the project. However, due to low demand, the project is being shut down. The equipment was depreciated using the straight-line method and can be sold for $390,000 today. The company's tax rate is 35 percent. What is the aftertax salvage value of the equipment? Multiple Choice $307,750 $526,500 $431,125 $472,250 $390,000
Power Manufacturing has equipment that it purchased 6 years ago for $2,500,000. The equipment was used for a project that was intended to last for 8 years and was being depreciated over the life of the project. However, due to low demand, the project is being shut down. The equipment was depreciated using the straight-line method and can be sold for $390,000 today. The company's tax rate is 35 percent. What is the aftertax salvage value of the equipment? Multiple Choice $307,750 $526,500 $431,125 $472,250 $390,000
Chapter9: Capital Budgeting And Cash Flow Analysis
Section: Chapter Questions
Problem 11P
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Question
Power Manufacturing has equipment that it purchased 6 years ago for $2,500,000. The equipment was used for a project that was intended to last for 8 years and was being
Multiple Choice
-
$307,750
-
$526,500
-
$431,125
-
$472,250
-
$390,000
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