Question
Project A is to be closed and all equipment scrapped in year 10. At that point, Project A has a salvage value of $2,000,000 and
Project A is to be closed and all equipment scrapped in year 10. At that point, Project A has a salvage value of $2,000,000 and book value of $200,000. The tax rate is 27%, and the firms WACC is 10%. Please calculate the present value of the cash flow for liquidation of equipment in year 10 as of time 0.
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Financial Markets and Institutions
Authors: Anthony Saunders, Marcia Cornett
6th edition
9780077641849, 77861663, 77641841, 978-0077861667
