An asset used in a four-year project falls in the five-year MACRS class for tax purposes. The asset has an acquisition cost of $6,000,000 and will be sold for $1,200,000 at the end of the project. If the tax rate is 34 percent, what is the aftertax salvage value of the asset? Refer to the MACRS schedule. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. Enter your answer in dollars, not millions of dollars, e.g., 1,234,567.) Aftertax salvage value

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
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An asset used in a four-year project falls in the five-year MACRS class for tax purposes. The asset has an
acquisition cost of $6,000,000 and will be sold for $1,200,000 at the end of the project. If the tax rate is 34
percent, what is the aftertax salvage value of the asset? Refer to the MACRS schedule. (Do not round
intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. Enter your answer
in dollars, not millions of dollars, e.g., 1,234,567.)
Aftertax salvage value
S
Transcribed Image Text:An asset used in a four-year project falls in the five-year MACRS class for tax purposes. The asset has an acquisition cost of $6,000,000 and will be sold for $1,200,000 at the end of the project. If the tax rate is 34 percent, what is the aftertax salvage value of the asset? Refer to the MACRS schedule. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. Enter your answer in dollars, not millions of dollars, e.g., 1,234,567.) Aftertax salvage value S
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