Problem 12-8 After-Tax Cash Flow from Sale of Assets (LG12-4) Your firm needs a computerized machine tool lathe which costs $46,000 and requires $11,600 in maintenance for each year of its 3- year life. After three years, this machine will be replaced. The machine falls into the MACRS 3-year class life category. Assume a tax rate of 35 percent and a discount rate of 13 percent. If the lathe can be sold for $4,600 at the end of year 3, what is the after-tax salvage value? (Round your answer to 2 decimal places.) Answer is complete but not entirely correct. Salvage value after $ 1,430.65 tax

Problem 12-8 After-Tax Cash Flow from Sale of Assets (LG12-4) Your firm needs a computerized machine tool lathe which costs $46,000 and requires $11,600 in maintenance for each year of its 3- year life. After three years, this machine will be replaced. The machine falls into the MACRS 3-year class life category. Assume a tax rate of 35 percent and a discount rate of 13 percent. If the lathe can be sold for $4,600 at the end of year 3, what is the after-tax salvage value? (Round your answer to 2 decimal places.) Answer is complete but not entirely correct. Salvage value after $ 1,430.65 tax

EBK CFIN

6th Edition

ISBN:9781337671743

Author:BESLEY

Publisher:BESLEY

Chapter10: Project Cash Flows And Risk

Section: Chapter Questions

Problem 5PROB

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