The after-tax salvage value of an asset. Introduction: The estimated resale cost of an asset at the end of the asset’s useful life is the salvage value. The salvage value is subtracted from the fixed assets cost to find the amount of depreciation on the asset.

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Chapter 9, Problem 7QP

Summary Introduction

To find: The after-tax salvage value of an asset.

Introduction:

The estimated resale cost of an asset at the end of the asset’s useful life is the salvage value. The salvage value is subtracted from the fixed assets cost to find the amount of depreciation on the asset.

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An asset used in a 4-year project falls in the 5-year MACRS class for tax purposes. The asset has an acquisition cost of $7.6 million and will be sold for $1.4 million at the end of the project. If the tax rate is 21 percent, what is the aftertax salvage value of the asset? Refer to (MACRS schedule)

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 $18,720,000 and will be sold for $4,160,000 at the end of the project. If the tax rate is 22 percent, what is the aftertax salvage value of the asset?

Consider an asset that costs $700,000 and is depreciated straight-line to zero over its seven-year 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 $151,000. If the relevant tax rate is 23 percent, what is the aftertax cash flow from the sale of this asset? Aftertax salvage value=

Answer 2

Question

Chapter 9, Problem 7QP

Summary Introduction

To find: The after-tax salvage value of an asset.

Introduction:

The estimated resale cost of an asset at the end of the asset’s useful life is the salvage value. The salvage value is subtracted from the fixed assets cost to find the amount of depreciation on the asset.

Expert Solution & Answer

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Check out a sample textbook solution

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Answer 3

Question

Chapter 9, Problem 7QP

Summary Introduction

To find: The after-tax salvage value of an asset.

Introduction:

The estimated resale cost of an asset at the end of the asset’s useful life is the salvage value. The salvage value is subtracted from the fixed assets cost to find the amount of depreciation on the asset.

Expert Solution & Answer

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Check out a sample textbook solution

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Answer 4

Question

Chapter 9, Problem 7QP

Summary Introduction

To find: The after-tax salvage value of an asset.

Introduction:

The estimated resale cost of an asset at the end of the asset’s useful life is the salvage value. The salvage value is subtracted from the fixed assets cost to find the amount of depreciation on the asset.

Expert Solution & Answer

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Answer 5

Chapter 9, Problem 7QP

Summary Introduction

To find: The after-tax salvage value of an asset.

Introduction:

The estimated resale cost of an asset at the end of the asset’s useful life is the salvage value. The salvage value is subtracted from the fixed assets cost to find the amount of depreciation on the asset.

Answer 6

Chapter 9, Problem 7QP

Summary Introduction

To find: The after-tax salvage value of an asset.

Introduction:

The estimated resale cost of an asset at the end of the asset’s useful life is the salvage value. The salvage value is subtracted from the fixed assets cost to find the amount of depreciation on the asset.

Answer 7

Chapter 9, Problem 7QP

Summary Introduction

To find: The after-tax salvage value of an asset.

Introduction:

The estimated resale cost of an asset at the end of the asset’s useful life is the salvage value. The salvage value is subtracted from the fixed assets cost to find the amount of depreciation on the asset.

Answer 8

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Answer 9

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Answer 11

Ch. 9.1 - Prob. 9.1ACQ Ch. 9.1 - What is the stand-alone principle?Ch. 9.2 - Prob. 9.2ACQ Ch. 9.2 - Prob. 9.2BCQ Ch. 9.2 - Explain why interest paid is not a relevant cash...Ch. 9.3 - What is the definition of project operating cash...Ch. 9.3 - In the shark attractant project, why did we add...Ch. 9.3 - Prob. 9.3CCQ Ch. 9.4 - Prob. 9.4ACQ Ch. 9.4 - How is depreciation calculated for fixed assets...

The after-tax salvage value of an asset. Introduction: The estimated resale cost of an asset at the end of the asset’s useful life is the salvage value. The salvage value is subtracted from the fixed assets cost to find the amount of depreciation on the asset.

Solution Summary: The author explains how the after-tax salvage value of an asset is calculated by adding the depreciation amount from the MACRS table for each of the first 4 years.

Concept explainers

To find: The after-tax salvage value of an asset.

Introduction:

The estimated resale cost of an asset at the end of the asset’s useful life is the salvage value. The salvage value is subtracted from the fixed assets cost to find the amount of depreciation on the asset.

Want to see the full answer?

Chapter 9 Solutions

The after-tax salvage value of an asset. Introduction: The estimated resale cost of an asset at the end of the asset’s useful life is the salvage value. The salvage value is subtracted from the fixed assets cost to find the amount of depreciation on the asset.

Solution Summary: The author explains how the after-tax salvage value of an asset is calculated by adding the depreciation amount from the MACRS table for each of the first 4 years.

Concept explainers

To find: The after-tax salvage value of an asset. Introduction: The estimated resale cost of an asset at the end of the asset’s useful life is the salvage value. The salvage value is subtracted from the fixed assets cost to find the amount of depreciation on the asset.

Want to see the full answer?

Chapter 9 Solutions

To find: The after-tax salvage value of an asset.

Introduction:

The estimated resale cost of an asset at the end of the asset’s useful life is the salvage value. The salvage value is subtracted from the fixed assets cost to find the amount of depreciation on the asset.