Question
A. Consider an asset that costs $1,126,113 and is depreciated straight-line to zero over its 14-year tax life. The asset is to be used in
A. Consider an asset that costs $1,126,113 and is depreciated straight-line to zero over its 14-year tax life. The asset is to be used in a 6-year project; at the end of the project, the asset can be sold for $165,581. If the relevant tax rate is 0.28, what is the aftertax cash flow from the sale of this asset (SVNOT)?
B. Consider an asset that costs $566,153 and is depreciated straight-line to 49,899 over its 16-year tax life. The asset is to be used in a 7-year project; at the end of the project, the asset can be sold for $259,794. If the relevant tax rate is 0.21, what is the aftertax cash flow from the sale of this asset (SVNOT)?
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Stocks Bonds And The Investment Horizon
Authors: Haim Levy
1st Edition
9811250146, 978-9811250149
