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The Capital Investment Institute has just purchased an asset they intend to use in their business. The machine has a cost of $60m and they

The Capital Investment Institute has just purchased an asset they intend to use in their business. The machine has a cost of $60m and they intend to depreciate this for 12 years straight line. The taxation office has determined that this be depreciated over 6 years straight line.

The project they are undertaking will last 4 years and the asset will be sold at that time for $4m.

Calculate the after-tax salvage CF in Year 4? Assume a 20% tax rate. Show Workings.

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