Vulture City Inc. is now at the end of the final year of a project. The equipment originally cost $22,500, of which 75% has been depreciated. The firm can sell the used equipment today for $6,000, and its tax rate is 40%. What is the equipment's after-tax salvage value for use in a capital budgeting analysis? Note that if the equipment's final market value is less than its book value, the firm will receive a tax credit as a result of the sale. O a. $5,558 O b. $5,850 O c.$6,143 O d. $6,450 O e. $6,772
Vulture City Inc. is now at the end of the final year of a project. The equipment originally cost $22,500, of which 75% has been depreciated. The firm can sell the used equipment today for $6,000, and its tax rate is 40%. What is the equipment's after-tax salvage value for use in a capital budgeting analysis? Note that if the equipment's final market value is less than its book value, the firm will receive a tax credit as a result of the sale. O a. $5,558 O b. $5,850 O c.$6,143 O d. $6,450 O e. $6,772
Chapter9: Capital Budgeting And Cash Flow Analysis
Section: Chapter Questions
Problem 9P
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![QUESTION 29
Vulture City Inc. is now at the end of the final year of a project. The equipment originally cost $22,500, of which 75% has been depreciated. The firm can sell the used equipment
today for $6,000, and its tax rate is 40%. What is the equipment's after-tax salvage value for use in a capital budgeting analysis? Note that if the equipment's final market value is less
than its book value, the firm will receive a tax credit as a result of the sale.
O a. $5,558
b. $5,850
O c. $6,143
O d. $6,450
O e. $6,772](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F21a4f907-aa38-4c82-a3ba-4693caa353b8%2F012a3aca-4f3c-4ef1-8b3b-ee54f2a0c942%2Fw23qpb_processed.png&w=3840&q=75)
Transcribed Image Text:QUESTION 29
Vulture City Inc. is now at the end of the final year of a project. The equipment originally cost $22,500, of which 75% has been depreciated. The firm can sell the used equipment
today for $6,000, and its tax rate is 40%. What is the equipment's after-tax salvage value for use in a capital budgeting analysis? Note that if the equipment's final market value is less
than its book value, the firm will receive a tax credit as a result of the sale.
O a. $5,558
b. $5,850
O c. $6,143
O d. $6,450
O e. $6,772
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