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Problem 10-7 Calculating Salvage Value [LO1] Consider an asset that costs $645,000 and is depreciated straight-line...

Problem 10-7 Calculating Salvage Value [LO1] Consider an asset that costs $645,000 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 $129,000. If the relevant tax rate is 22 percent, what is the aftertax cash flow from the sale of this asset? (Do not round intermediate calculations.)

Aftertax salvage value= ?

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Answer #1

Please refer to below spreadsheet for calculation and answer. Cell reference also provided.

Cell reference -

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