Question

Consider an asset that costs $176,000 and is depreciated straight-line to zero over its 12-year tax life. The asset is to be used in a 5-year project; at the end of the project, the asset can be sold for $22,000. |

Required : |

If the relevant tax rate is 31 percent, what is the aftertax
cash flow from the sale of this asset? |

rev: 09_18_2012

$44,656.34

$49,357.00

$15,180.00

$410,752.00

$47,006.67

Answer #1

**Answer is
$47,006.67**

Cost of Asset = $176,000

Useful Life = 12 years

Annual Depreciation = Cost of Asset / Useful Life

Annual Depreciation = $176,000 / 12

Annual Depreciation = $14,666.67

Book Value at the end of Year 5 = $176,000 - 5 *
$14,666.67

Book Value at the end of Year 5 = $102,666.65

Salvage Value = $22,000

After-tax Salvage Value = Salvage Value - (Salvage Value - Book
Value) * tax

After-tax Salvage Value = $22,000 - ($22,000 - $102,666.65) *
0.31

After-tax Salvage Value = $22,000 + $25,006.67

After-tax Salvage Value = $47,006.67

Consider an asset that costs $202,400 and is depreciated
straight-line to zero over its 9-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 $25,300.
Required :
If the relevant tax rate is 33 percent, what is the aftertax
cash flow from the sale of this asset? (Do not round your
intermediate calculations.)
rev: 09_18_2012
$16,951.00
$234,037.00
$41,175.75
$37,254.25
$39,215.0

Consider an asset that costs $484,000 and is depreciated
straight-line to zero over its 13-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 $60,500.
Required :
If the relevant tax rate is 35 percent, what is the aftertax
cash flow from the sale of this asset? (Do not round your
intermediate calculations.)
rev: 09_18_2012
$130,540.38
$1,267,487.00
$39,325.00
$124,013.36
$137,067.40

A.
Consider an asset that costs $264,000 and is depreciated
straight-line to zero over its 12-year tax life. The asset is to be
used in a 5-year project; at the end of the project, the asset can
be sold for $33,000.
Required :
If the relevant tax rate is 32 percent, what is the aftertax
cash flow from the sale of this asset? (Do not round your
intermediate calculations.)
rev: 09_18_2012
$634,932.00
$71,720.00
$68,134.00
$75,306.00
$22,440.00
B.
Summer Tyme,...

Consider an asset that costs $712,000 and is depreciated
straight-line to zero over its eight-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 $184,000. If the relevant tax rate is 35
percent, what is the aftertax cash flow from the sale of this
asset? (Do not round intermediate calculations.)
Aftertax salvage value $

Consider an asset that costs $690,000 and is depreciated
straight-line to zero over its eight-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 $147,000. If the relevant tax rate is 21
percent, what is the aftertax cash flow from the sale of this
asset? (Do not round intermediate calculations.)
Aftertax salvage value?

Consider an asset that costs $193,600 and is depreciated
straight-line to zero over its 9-year tax life. The asset is to be
used in a 5-year project; at the end of the project, the asset can
be sold for $24,200.
Required :
If the relevant tax rate is 34 percent, what is the aftertax
cash flow from the sale of this asset? (Do not round your
intermediate calculations.)

Consider an asset that costs $220,000 and is depreciated
straight-line to zero over its 5-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 $27,500.
Required :
If the relevant tax rate is 32 percent, what is the aftertax
cash flow from the sale of this asset? (Do not round your
intermediate calculations.)

Consider an asset that costs $705,000 and is depreciated
straight-line to zero over its eight-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 $153,000. If the relevant tax rate is 24
percent, what is the aftertax cash flow from the sale of this
asset? (Do not round intermediate
calculations.)
After tax salvage value ?

Consider an asset that costs $316,800 and is depreciated
straight-line to zero over its 12-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 $39,600.
Required :
If the relevant tax rate is 32 percent, what is the aftertax
cash flow from the sale of this asset? (Do not round your
intermediate calculations.)
A) $26,928.00
B) $660,540.00
C) $81,496.80
D) $73,735.20
E) $77,616.00

Consider an asset that costs $193,600 and is depreciated
straight-line to zero over its 11-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 $24,200. Required : If the relevant tax rate is 34
percent, what is the aftertax cash flow from the sale of this
asset? (Do not round your intermediate calculations.)
$57,860.00
$60,753.00
$15,972.00
$54,967.00
$493,208.00

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