Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN: 9781337395083
Author: Eugene F. Brigham, Phillip R. Daves
Publisher: Cengage Learning
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Chapter 13, Problem 3P
Summary Introduction
To determine: Net salvage value.
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Net Salvage Value
Allen Air Lines must liquidate some equipment that is being replaced. The equipment originally cost $18.2 million, of which 75% has been depreciated. The used equipment can be sold today for $5.2 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 $1.2 million should be entered as 1,200,000. Round your answer to the nearest dollar.
2$
Net Salvage Value
Allen Air Lines must liquidate some
equipment that is being replaced. The
equipment originally cost $6.4 million, of
which 75% has been depreciated. The
used equipment can be sold today for
$3.2 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.
LA
Allen Air Lines must liquidate some equipment that is being replaced. Theequipment originally cost $12 million, of which 75% has been depreciated.The used equipment can be sold today for $4 million, and its tax rate is40%. What is the equipment’s after-tax net salvage value?
Chapter 13 Solutions
Intermediate Financial Management (MindTap Course List)
Ch. 13 - Define each of the following terms:
Project cash...Ch. 13 - Prob. 2QCh. 13 - Why is it true, in general, that a failure to...Ch. 13 - Prob. 4QCh. 13 - Prob. 5QCh. 13 - Prob. 6QCh. 13 - Why are interest charges not deducted when a...Ch. 13 - Prob. 8QCh. 13 - Prob. 9QCh. 13 - Distinguish among beta (or market) risk,...
Ch. 13 - Prob. 11QCh. 13 - Talbot Industries is considering launching a new...Ch. 13 - Prob. 2PCh. 13 - Prob. 3PCh. 13 - Prob. 4PCh. 13 - Wendys boss wants to use straight-line...Ch. 13 - New-Project Analysis
The Campbell Company is...Ch. 13 - Prob. 7PCh. 13 - Inflation Adjustments
The Rodriguez Company is...Ch. 13 - Prob. 10PCh. 13 - Scenario Analysis Shao Industries is considering a...Ch. 13 - Prob. 1MCCh. 13 - Prob. 2MCCh. 13 - Prob. 3MCCh. 13 - Prob. 4MCCh. 13 - Prob. 5MCCh. 13 - Prob. 6MCCh. 13 - Calculate the cash flows for each year. Based on...Ch. 13 - Prob. 8MCCh. 13 - (1) What are the three types of risk that are...Ch. 13 - Prob. 12MCCh. 13 - Prob. 13MCCh. 13 - What is a real option? What are some types of real...
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- 14) Allen Air Lines must liquidate some equipment that is being replaced. The equipment originally cost $11.2 million, of which 75% has been depreciated. The used equipment can be sold today for $3.2 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 $1.2 million should be entered as 1,200,000. Round your answer to the nearest dollar. ________$arrow_forwardAllen Air Lines must liquidate some equipment that is being replaced. The equipment originally cost $13.8 million, of which 70% has been depreciated. The used equipment can be sold today for $4.6 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.arrow_forwardAllen Air Lines must liquidate some equipment that is being replaced. The equipment originally cost $6 million, of which 80% has been depreciated. The used equipment can be sold today for $3 million and Allen faces a 25% tax rate. 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. $arrow_forward
- Karsted Air Services is now in the final year of a project. Theequipment originally cost $29 million, of which 75% has been depreciated. Karsted can sellthe used equipment today for $8 million, and its tax rate is 35%. What is the equipment’safter-tax salvage value?arrow_forwardYour company has to liquidate some equipment that is being replaced. The originally cost of the equipment is $100,000. The firm has deprecated 65% of the original cost. The salvage value of the equipment today is $50,000. The firm has a tax rate of 30%. What is the equipment’s after-tax net salvage value? Please show your work.arrow_forwardAllen Air Lines must liquidate some equipment that is being replaced. The equipment originally cost $12 million, of which 75% has been depreciated. The federal-plus-state tax rate is 25%. What is the equipment’s after-tax net salvage value?arrow_forward
- What is the initial book value of a new piece of equipment given the following information? Note that not all items may be needed: Purchase price of new equipment is $113, Shipping cost of the new equipment is $6,000 Salvage value of old equipment being replaced is $51,000 Expected salvage value of the new equipment for depreciation purposes is $34,000 Installation cost for the new equipment is $13,000 Tax rate is 31%arrow_forwardA project has to sell a machine that is obsolete. The market department finds a buyer who is willing to pay $100, 000 for the machine. The machine was purchased 4 years ago for $1.1 million. The accounting department notes that the depreciation method for this machine is straight line, and the machine will be depreciated to zero over a five - year time period after purchase. What is the machine's after - tax salvage value? Tax rate is 21%. Question 1 options: $1, 635.24 $2, 314.05 $142, 000.00 $2,784.62 - $289.26arrow_forwardAcorporation purchased a machine for $60,000 five years ago. It had an estimated life of 10 years and an estimated salvage value of $9,000. The current BV of this machine is $34,500. If the current MV of the machine is$40,500 and the effective income tax rate is 29%, what is the after-tax investment value of the machine? Use the outsider viewpoint. Solve, (a) $28,755 (b) $40,500 (c) $38,760 (d) $37,455 (e) $36,759arrow_forward
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