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Edders, Inc. has a truck purchased seven years ago at a cost of $6,000. At the time of purchase, the ultimate salvage value was estimated
Edders, Inc. has a truck purchased seven years ago at a cost of $6,000. At the time of purchase, the ultimate salvage value was estimated at $500, but salvage value was ignored in depreciation deductions. The truck is now fully depreciated. Assuming a tax rate of 40%, if the truck is sold for $500, the after-tax cash inflow for capital budgeting purposes will be: |
$200
$500
$300
$100
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