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Using Excell Q1: Your company is evaluating a new project that will require the purchase of...

Using Excell

Q1: Your company is evaluating a new project that will require the purchase of an asset for $22,000 installed. The asset will be depreciated S/L for 5 years to a zero salvage. Your company is expecting the asset to have a market value of $5,500 at the end of 4 years. The applicable tax rate is 30% and the cost of capital is 12% a) Calculate the gain or (loss) from the sale of the asset at the end of 4 years? (And indicate whether it is a gain or a loss. b) Calculate the tax consequences from the sale of the asset in 4 years and indicate whether it is a tax liability or tax saving.

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