Allen Air Lines must liquidate some equipment that is being replaced. The equipment originally cost $13.5 million, of which 65% has been depreciated. The used equipment can be sold today for $5.4 million, and its tax rate is 25%. What is the equipment's after-tax net salvage value? Enter your answer in dollars. For example, an answer of $1.2 million should be entered as 1,200,000. Round your answer to the nearest dollar.
Allen Air Lines must liquidate some equipment that is being replaced. The equipment originally cost $13.5 million, of which 65% has been depreciated. The used equipment can be sold today for $5.4 million, and its tax rate is 25%. What is the equipment's after-tax net salvage value? Enter your answer in dollars. For example, an answer of $1.2 million should be entered as 1,200,000. Round your answer to the nearest dollar.
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter19: Capital Investment
Section: Chapter Questions
Problem 18E
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Allen Air Lines must liquidate some equipment that is being replaced. The equipment originally cost $13.5 million, of which 65% has been depreciated. The used equipment can be sold today for $5.4 million, and its tax rate is 25%. What is the equipment's after-tax net salvage value? Enter your answer in dollars. For example, an answer of $1.2 million should be entered as 1,200,000. Round your answer to the nearest dollar.
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