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The following information relating to an investment in equipment has been extracted from the books of LRB Ltd: The total purchase price is $78,695. Net
The following information relating to an investment in equipment has been extracted from the books of LRB Ltd: The total purchase price is $78,695. Net sales revenue (relating to the equipment): Year-1 $38,000; Year-2 $29,000; Year-3 $24,000; and Year-4 $20,000. The required rate of return is 12%. The expected salvage value is $13,134 at the end of year 4. The depreciation rate is 16% straight line. If the applicable tax rate is 32%, calculate the tax amount in the fourth year relating to the sale of the equipment only
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