An asset used in a five-year project falls in the five-year MACRS class for tax purposes. The asset has an acquisition cost of $2,600,000 and will be sold for $500,000 at the end of the 5th year. If the tax rate is 21 percent, what is the after-tax salvage value of the asset? The 5-year MACRS schedule is below. Year 1 2 3 456 Multiple Choice Depreciation % 20% $426,449.60 $489,348.80 32% 19.2% 11.52% 11.52% 5.76%

An asset used in a five-year project falls in the five-year MACRS class for tax purposes. The asset has an acquisition cost of $2,600,000 and will be sold for $500,000 at the end of the 5th year. If the tax rate is 21 percent, what is the after-tax salvage value of the asset? The 5-year MACRS schedule is below. Year 1 2 3 456 Multiple Choice Depreciation % 20% $426,449.60 $489,348.80 32% 19.2% 11.52% 11.52% 5.76%

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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