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Summer Tyme, Inc., is considering a new 3-year expansion project that requires an initial fixed asset investment of $999,231. The fixed asset will be depreciated straight-line to 61,255 over its 3-year tax life, after which time it will have a market value of $86,244. The project requires an initial investment in net working capital of $79,054. The project is estimated to generate $177,510 in annual sales, with costs of $92,903. The tax rate is 0.39 and the required return on the project is 0.09. What is the aftertax salvage value in year 3? (Make sure you enter the number with the appropriate +/- sign)

Summer Tyme, Inc., is considering a new 3-year expansion project that requires an initial fixed asset investment of $999,231. The fixed asset will be depreciated straight-line to 61,255 over its 3-year tax life, after which time it will have a market value of $86,244. The project requires an initial investment in net working capital of $79,054. The project is estimated to generate $177,510 in annual sales, with costs of $92,903. The tax rate is 0.39 and the required return on the project is 0.09. What is the aftertax salvage value in year 3? (Make sure you enter the number with the appropriate +/- sign)

Principles of Accounting Volume 2
Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter11: Capital Budgeting Decisions
Section: Chapter Questions
Problem 2PB: Markoff Products is considering two competing projects, but only one will be selected. Project A...
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Summer Tyme, Inc., is considering a new 3-year expansion project that requires an initial fixed asset investment of $999,231. The fixed asset will be depreciated straight-line to 61,255 over its 3-year tax life, after which time it will have a market value of $86,244. The project requires an initial investment in net working capital of $79,054. The project is estimated to generate $177,510 in annual sales, with costs of $92,903. The tax rate is 0.39 and the required return on the project is 0.09. What is the aftertax salvage value in year 3? (Make sure you enter the number with the appropriate +/- sign)

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