Consider an asset that costs $211,200 and is depreciated straight-line to zero over its 8-year tax...

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Finance

Consider an asset that costs $211,200 and is depreciatedstraight-line to zero over its 8-year tax life. The asset is to beused in a 5-year project; at the end of the project, the asset canbe sold for $26,400.

Required :
If the relevant tax rate is 35 percent, what is the aftertaxcash flow from the sale of this asset? (Do not round yourintermediate calculations.)

rev: 09_18_2012
$42,636.00
$44,880.00
$17,160.00
$47,124.00
$257,412.00

Answer & Explanation Solved by verified expert

4.5 Ratings (939 Votes)

Lets calculate the cash flow from selling the asset at the end of project life The original purchase price of asset 211200 Useful life 8 years With straight line method See Answer

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Consider an asset that costs $211,200 and is depreciatedstraight-line to zero over its 8-year tax life. The asset is to beused in a 5-year project; at the end of the project, the asset canbe sold for $26,400. Required :If the relevant tax rate is 35 percent, what is the aftertaxcash flow from the sale of this asset? (Do not round yourintermediate calculations.)rev: 09_18_2012$42,636.00$44,880.00$17,160.00$47,124.00$257,412.00