Consider an asset that costs $311,000 and is depreciated straight-line to zero over its six-year tax life. The asset is to be used in a four-year project; at the end of the project, the asset can be sold for $58,000. If the relevant tax rate is 21 percent, what is the aftertax cash flow from the sale of this asset? a $42,473.33 b $68,411.19 с $40,466.67 d e $67,590.00 $70,103.33

Consider an asset that costs $311,000 and is depreciated straight-line to zero over its six-year tax life. The asset is to be used in a four-year project; at the end of the project, the asset can be sold for $58,000. If the relevant tax rate is 21 percent, what is the aftertax cash flow from the sale of this asset? a $42,473.33 b $68,411.19 с $40,466.67 d e $67,590.00 $70,103.33

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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Consider an asset that costs $422,400 and is depreciated straight-line to zero over its 8- year tax life. The asset is to be used in a 6-year project; at the end of the project, the asset can be sold for $52,800. If the relevant tax rate is 24 percent, what is the aftertax cash flow from the sale of this asset? Multiple Choice $268,236.00 $68,745.60 $62,198.40 $65,472.00 $40,128.00 Drou 10 Novt -
Consider an asset that costs $369,600 and is depreciated straight-line to zero over its 7-year tax life. The asset is to be used in a 4-year project; at the end of the project, the asset can be sold for $46,200. If the relevant tax rate is 23 percent, what is the aftertax cash flow from the sale of this asset? Multiple Choice $72,006.00 $35,574.00 $311,862.00 $68,405.70 $75,606.30
Consider an asset that costs $528,000 and is depreciated straight-line to zero over its 6-year tax life. The asset is to be used in a 3-year project; at the end of the project, the asset can be sold for $66,000. If the relevant tax rate is 22 percent, what is the aftertax cash flow from the sale of this asset? $115,038.00 $104,082.00 $109,560.00 $51,480.00 $429,012.00
Problem 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 $6,100,000 and will be sold for $1,300,000 at the end of the project. If the tax rate is 27%, what is the after-tax salvage value of the asset? MACRS Depreciation: 2 3 4 5 6 7 8 3 year class 33.33% 44.45% 14.81% 7.41% 5 year class 20.00% 32.00% 19.20% 11.52% 11.52% 5.76% 7 year class 14.29% 24.49% 17.49% 12.49% 8.93% 8.92% 8.93% 4.46%
for this equipment. 0. Calculating Salvage Value Consider an asset that costs $635,000 and is depreciated straight-line to zero over its eight-vear tax life. The asset is to be used in a five-year project; at the end of the project, the asset can be sold for S105,000. If the relevant tax rate is 22 percent, what is the aftertax cash flow from the sale of this asset? LO 2
Consider an asset cost 1.5 million and is depreciated straight ine to zero over its eight years tax life . The asset is to be used in a six year project and at the end of the project the asset can be sold for 250,000 $ . If the tax rate is 24 % calculate the after tax salvage of the asset
An asset purchased today at a cost of $50,000 is depreciated straight-line down to value 0 over a period of 5 years, for tax purposes. Suppose the asset is sold at a price of $30,000 at the end of 2 years. What is the after-tax cash inflow from salvage (selling the asset), assuming a tax rate of 40%? a) $30,000 b) $26,000 c) $38,000 d) $20,000 e) None of the above
An asset used in a four-year project falls in the five- year MACRS class for tax purposes.\table[[Property Class], [Year, Three-Year, Five Year, Seven - Year ],[1,33.33%, 20.00 %, 14.29% The asset has an acquisition cost of $6,020,000 and will be sold for $ 1,220,000 at the end of the project. If the tax rate is 35 percent, what is the aftertax salvage value of the asset? Refer to Table 10.7. (Do not round intermediate calculations. Round your answer to the nearest whole dollar. Enter your answer in dollars, not millions of dollars, e. g. 1,234,567. Property Class Year Three-Year Five-Year Seven-Year 1 33.33% 20.00% 14.29% 23 2 44.45 32.00 24.49 3 14.81 19.20 17.49 4 7.41 11.52 12.49 5 11.52 8.93 69 5.76 8.92 8.93 8 4.46
In year 0 you purchase an asset for $500,000 and in year 1 you receive a positive cash flow of $100,000 from operating the asset. Following a MACRS 7-year depreciation schedule (year 1 recovery rate of 14.29 percent) and assuming you are in a 39% tax bracket, what is your year 1 after tax cash flow (ATCF) to the nearest $50 ? O a) $88,750 O b) $28,550 c) $400,000 O d) $380,750 O e) $11,250
A nine year project involves equipment costing $2,320,000 that will be depreciated using the five-year MACRS schedule. If the estimated pre-tax salvage value for the equipment at the end of the project's life is $417,600, what is the after-tax salvage value for the equipment? Assume a marginal tax rate of 21 percent. O $329,904 $399.184 $6,496 O $505.296
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 3456 Multiple Choice Depreciation % 20% 32% 19.2% 11.52% 11.52% 5.76% $426,449,60 $489,348.80
An asset used in a 4-year project falls in the 5-year MACRS class (MACRS Table) for tax purposes. The asset has an acquisition cost of $19,440,000 and will be sold for $4,320,000 at the end of the project. If the tax rate is 24 percent, what is the aftertax salvage value of the asset? Multiple Choice $4,089,416 $3,283,200 $4,550,584 $4,293,886 $3,884,945

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