An asset used in a 4-year project falls in the 5-year MACRS class, for tax purposes. The asset hasan acquisition cost of $22,302,334 and will be sold for $5,717,194 at the end of the project. If thetax rate is 0.37, what is the aftertax salvage value of the asset (SVNOT)?TABLE 9.7Modified ACRS depreciation allowancesYear 3-Year133.33%44.4514.817.412345678Property Class5-Year20.00%32.0019.2011.5211.525.767-Year14.29%24.4917.4912.498.938.928.934.46

After-tax salvage value refers to the value of the asset at the time of sale of an asset after…

Answered: An asset used in a 4-year project falls…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter9: Capital Budgeting And Cash Flow Analysis

Section9.A: Depreciation

Problem 1P

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An asset with a purchase price of $486,966 falls in the 5-year MACRS asset class. The asset will be sold at the end of a three year project for $153,883. What is the book value of the asset at the end of the project? Round your answer to the nearest dollar. Year Depreciable Allowance 1 20% 32 19 12 11 6. 6. 4-
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