Consider an asset that costs $745,000 and is depreciated straight-line to zero over its eight-year tax life. The asset is to be used in a five-year project; at the end of the project, the asset can be sold for $135,000. If the relevant tax rate is 21 percent, what is the aftertax cash flow from the sale of this asset? Input area: Costs Depreciable life. Asset used in years Pretax salvage value Tax rate Output area: $745,000 Annual depreciation Accumulated depreciation Book value Aftertax cash flow Pretax salvage value Taxes Aftertax salvage value 8 5 $135,000 21% (Use cells A6 to B10 from the given information to complete this question. Taxes on the salvage value should be negative for a tax liability and positive for a tax credit.) +

Consider an asset that costs $745,000 and is depreciated straight-line to zero over its eight-year tax life. The asset is to be used in a five-year project; at the end of the project, the asset can be sold for $135,000. If the relevant tax rate is 21 percent, what is the aftertax cash flow from the sale of this asset? Input area: (Use cells A6 to B10 from the given information to complete this question. Taxes on the salvage value should be negative for a tax liability and positive for a tax credit.) Output area