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A company invested in an asset that cost $5,000. The asset was depreciated using straight line depreciation, assuming a depreciable life of 5 years, and
A company invested in an asset that cost $5,000. The asset was depreciated using straight line depreciation, assuming a depreciable life of 5 years, and no salvage value. The asset generated $3,000 each year for 3 years. At the end of the 3 years, the company sold the asset for $1,500. The company is in a 26% incremental tax bracket. N ACTUAL $ ATCE -10,000 0 ATUAL $ BTCF - $5,000 $3,000 $3,000 $4,500 1 2 3 THIS VALUE The value of the ACTUAL $ AFTER TAX CASH FLOW (ATCF) at n=3 is closest to: a. $4,110 b. $3,980 O c. $3,760 d. $2,450
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