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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 $40m and they
The Capital Investment Institute has just purchased an asset they intend to use in their business. The machine has a cost of $40m and they intend to depreciate this for 6 years straight line. The taxation office has determined that this be depreciated over 8 years straight line.
The project they are undertaking will last 6 years and the asset will be sold at that time for $2m.
Calculate the after-tax salvage CF in Year 6? Assume a 25% tax rate.
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