Question-1

The following information relating to an investment in equipment has been extracted from the books of Pro-CB Ltd:

Total purchase price $66,609; salvage value $3,478 at the end of year-4; net sales revenue (relating to the equipment): Year-1 $35,000; Year-2 $27,000, Year-3 $21,000 and Year-4 $15,000; applicable tax rate is 30%; and the required rate of return is 13%.

If the depreciation rate is 21% straight line, calculate the tax amount in the fourth year relating to the sale of the equipment only.

Answer by using financial calculator formula .