Question

Consider an asset that costs $595197 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 $152603. If the relevant tax rate is 35 percent, what is the aftertax cash flow from the sale of this asset?

Answer #1

Depreciation per year = Asset price / total life

Depreciation = 595197 / 7 = 85028.14286

Book value of asset = Asset purchase price or cost - Depreciation x total number of usage in years

Book value of asset = 595197 - 85028.14286 x 5

Book value of asset = 170056.2857

Loss on sales of asset = Sales value – Book value

Loss on sales of asset = 152603 - 170056.2857

Loss on sales of asset = - 17453.2857

After tax cash flow = Sales value + |Loss on sale of asset| x tax rate

After tax cash flow = 152603 + 17453.2857 x 35%

**After tax cash flow = $158,711.65**

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 $211,200 and is depreciated
straight-line to zero over its 10-year tax life. The asset is to be
used in a 7-year project; at the end of the project, the asset can
be sold for $26,400.
If the relevant tax rate is 35 percent, what is the aftertax
cash flow from the sale of this asset?
$257,412.00
$41,302.80
$39,336.00
$37,369.20
$17,160.00

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 $457,600 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 $57,200. If the relevant tax rate is 23 percent, what
is the aftertax cash flow from the sale of this asset?

Consider an asset that costs $404,800 and is depreciated
straight-line to zero over its 6-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 $50,600.
If the relevant tax rate is 21 percent, what is the aftertax
cash flow from the sale of this asset?

Consider an asset that costs $501,600 and is depreciated
straight-line to zero over its 9-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 $62,700.
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.)
$157,795.00
$165,684.75
$149,905.25
$40,755.00
$1,138,017.00

Consider an
asset that costs $584,000 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 $182,000. 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.)
Multiple Choice
$168,852
$219,000
$182,000
$173,970
$189,770

Consider an asset that costs $1398017 and is depreciated
straight-line to zero over its 11-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 $129577. If the relevant tax rate is 0.36, what is the
aftertax cash flow from the sale of this asset?

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.)

ADVERTISEMENT

Get Answers For Free

Most questions answered within 1 hours.

ADVERTISEMENT

asked 13 minutes ago

asked 23 minutes ago

asked 46 minutes ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago

asked 2 hours ago

asked 2 hours ago

asked 2 hours ago

asked 2 hours ago

asked 2 hours ago

asked 2 hours ago