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A company is considering investing in a project that has a 10 year life. To pursue the project, the company must purchase a new piece
A company is considering investing in a project that has a 10 year life. To pursue the project, the company must purchase a new piece of equipment for $3,890,000 that has a life of 16 years. The equipment is depreciated straight line to zero. The machine is sold for $200,000 at the end of the projects life, and the company has a tax rate of 25%. What is the after tax salvage value of the equipment?
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$200,000
$514,687.50
-$1,258,750
$314,687.50
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