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Question: The manufacturing plant has an eight-year tax life and DEI uses straight-line depreciation. At the end of the project (i.e., the end of year
Question: The manufacturing plant has an eight-year tax life and DEI uses straight-line depreciation. At the end of the project (i.e., the end of year 5), the plant and equipment can be scrapped for $8.5 million. What is the after-tax salvage value of this plant and equipment? The plant and new equipment will cost $45 million to build. The companys tax rate is 30 percent.
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