Question

An asset used in a four-year project falls in the five-year MACRS class for tax purposes....

An asset used in a four-year project falls in the five-year MACRS class for tax purposes. The asset has an acquisition cost of $6,445,011.00 and will be sold for $1,795,576.00 at the end of the project (End of the 4th year). If the tax rate is 38.00%, what is the after-tax salvage value of the asset?

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

First, we need to find the accumulated depreciation for the first four years. We can do this by adding the MACRS depreciation amounts for each of the first four years and multiply this percentage times the cost of the asset.

Accumulated depreciation = $6,445,011.00(0.2000 + 0.3200 + 0.1920 + 0.1152) = $5,331,313.10

BV4 = $6,445,011.00 - $5,331,313.10 = $1,113,697.90

Aftertax salvage value = $1,795,576.00 + ($1,113,697.90 − $1,795,576.00)(0.38)

Aftertax salvage value = $1,536,462.32

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
An asset used in a four-year project falls in the five-year MACRS class for tax purposes....
An asset used in a four-year project falls in the five-year MACRS class for tax purposes. The asset has an acquisition cost of $6,939,381.00 and will be sold for $1,690,535.00 at the end of the project (End of the 4th year). If the tax rate is 36.00%, what is the after-tax salvage value of the asset?
An asset used in a four-year project falls in the five-year MACRS class for tax purposes....
An asset used in a four-year project falls in the five-year MACRS class for tax purposes. The asset has an acquisition cost of $7,300,000 and will be sold for $1,640,000 at the end of the project. If the tax rate is 35 percent, what is the after tax salvage value of the asset?
An asset used in a four-year project falls in the five-year MACRS class (MACRS Table) for...
An asset used in a four-year project falls in the five-year MACRS class (MACRS Table) for tax purposes. The asset has an acquisition cost of $8,500,000 and will be sold for $2,140,000 at the end of the project. If the tax rate is 22 percent, what is the aftertax salvage value of the asset?
An asset used in a four-year project falls in the five-year MACRS class for tax purposes....
An asset used in a four-year project falls in the five-year MACRS class for tax purposes. The asset has an acquisition cost of $6,110,000 and will be sold for $1,310,000 at the end of the project. If the tax rate is 21 percent, what is the aftertax salvage value of the asset? Refer to Table 8.3. (Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to 2 decimal places, e.g., 1,234,567.89.)
An asset used in a four-year project falls in the five-year MACRS class for tax purposes....
An asset used in a four-year project falls in the five-year MACRS class for tax purposes. The asset has an acquisiton cost of $8,300,000 and will be sold for $1,700,000 at the end of the project. If the tax rate is 35%, what is the after-tax salvage value? Use the following table below: Year ACRS %    1 20.00%    2 32.00% 3 19.20% 4 11.52% 5 11.52% 6 5.76%
An asset used in a four-year project falls in the five-year MACRS class (MACRS Table) for...
An asset used in a four-year project falls in the five-year MACRS class (MACRS Table) for tax purposes. The asset has an acquisition cost of $7,500,000 and will be sold for $1,740,000 at the end of the project. If the tax rate is 22 percent, what is the aftertax salvage value of the asset? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.)
An asset used in a 4-year project falls in the 5-year MACRS class for tax purposes....
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 $8,500,000 and will be sold for $2,120,000 at the end of the project. If the tax rate is 24 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 for tax purposes....
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 $8,300,000 and will be sold for $1,960,000 at the end of the project. If the tax rate is 22 percent, what is the aftertax salvage value of the asset? Refer to (MACRS schedule) (Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to the nearest whole number, e.g., 1,234,567)
An asset used in a 4-year project falls in the 5-year MACRS class for tax purposes....
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 $8,300,000 and will be sold for $1,960,000 at the end of the project. If the tax rate is 22 percent, what is the aftertax salvage value of the asset? Refer to (MACRS schedule) (Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to the nearest whole number, e.g., 1,234,567)
An asset used in a 4-year project falls in the 5-year MACRS class for tax purposes....
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 $9,000,000 and will be sold for $2,520,000 at the end of the project. If the tax rate is 24 percent, what is the aftertax salvage value of the asset? Refer to (MACRS schedule) (Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to the nearest whole number, e.g., 1,234,567)
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT