Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Impressive Services is now at the end of the final year of a project. The equipment originally cost $80,000, of which 90% has been depreciated.

Impressive Services is now at the end of the final year of a project. The equipment originally cost $80,000, of which 90% has been depreciated. The firm can sell the used equipment today for $5,000, and its tax rate is 22%. What is the equipments after-tax salvage value for use in a capital budgeting analysis? Note that if the equipment's final market value is less than its book value, the firm will receive a tax credit as a result of the sale.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Personal Finance

Authors: Jane King, Mary Carey

2nd Edition

0198748779, 9780198748779

More Books

Students also viewed these Finance questions