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Calculating Salvage Value27 (LO4) Consider an asset that costs $548,000 and can be depreciated at 20 percent per year (Class 8) over its eight-year life.

Calculating Salvage Value27 (LO4) Consider an asset that costs $548,000 and can be depreciated at 20 percent per year (Class 8) over its eight-year life. The asset is to be used in a five-year project; at the end of the project, the asset can be sold for $105,000. If the relevant tax rate is 35 percent, what is the after-tax cash flow from the sale of the asset? You can assume that there will be no assets left in the class in six years.

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