Question
8 years ago, a new machine cost $6,000,000 to purchase and an additional $530,000 for the installation. The machine was to be linearly depreciated to
8 years ago, a new machine cost $6,000,000 to purchase and an additional $530,000 for the installation. The machine was to be linearly depreciated to zero over 20 years.
The company has just sold the machine for $3,600,000, 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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International Financial Management
Authors: Jeff Madura
7th Edition
0324071744, 978-0324071740
