Question
8 years ago, a new machine cost $3 million to purchase and an additional $640,000 for the installation. The machine was to be linearly depreciated
8 years ago, a new machine cost $3 million to purchase and an additional $640,000 for the installation. The machine was to be linearly depreciated to zero over 20 years.
The company has just sold the machine for $1.8 million, and its marginal tax rate is 25%.
Part 1
What is the annual depreciation?
Part 2
What is the current book value?
Part 3
What is the after-tax salvage value?
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Financial Reporting Financial Statement Analysis And Valuation
Authors: James M Wahlen, Stephen P Baginskl, Mark T Bradshaw
10th Edition
0357722094, 978-0357722091
