Consider an asset that costs $501,600 and is depreciated straight-line to zero over its 9-year tax life. The asset is to be used in a 5-year project; at the end of the project, the asset can be sold for $62,700. Required : If the relevant tax rate is 32 percent, what is the aftertax cash flow from the sale of this asset? (Do not round your intermediate calculations.) rev: 09_18_2012 $108,275.94 $724,824.00 $113,974.67 $42,636.00 $119,673.40

An asset used in a 4-year project falls in the 5-year MACRS class (MACRS Table) for tax purposes. The asset has an acquisition cost of $16,020,000 and will be sold for $3,560,000 at the end of the project.

Required:

If the tax rate is 34 percent, what is the aftertax salvage value of the asset?

rev: 09_18_2012

$3,290,807

$2,349,600

$3,829,193

$3,455,347

$3,126,267