QUESTION 29Vulture 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 equipmenttoday 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 lessthan its book value, the firm will receive a tax credit as a result of the sale.O a. $5,558b. $5,850O c. $6,143O d. $6,450O e. $6,772

The after tax salvage value refers to the sale value of the equipment or machine after giving the…

Answered: Vulture City Inc. is now at the end of…

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

Problem 1PS

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