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Zeta Co is planning to undertake a project for which it will need to buy equipment costing $1.8 million. The useful life of the equipment

Zeta Co is planning to undertake a project for which it will need to buy equipment costing $1.8 million. The useful life of the equipment for tax purposes is 9 years depreciated using the straight-line method. As the project will last for 7 years, Zeta Co expects to sell the equipment at the end of year 7 for $500,000. If the tax rate is 30% what are the expected after-tax proceeds from the sale in year 7?

Possible answers:

a. $350,000

b. $470,000

c. $400,000

d. $30,000

e. $430,000

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