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?

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?

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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