What is aftertax salvage value of the asset

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Reference no: EM131352320

An asset used in a four-year project falls in the five-year MACRS class for tax purposes. The asset has an acquisition cost of $6,120,000 and will be sold for $1,320,000 at the end of the project. If the tax rate is 34 percent, what is the aftertax salvage value of the asset?

Refer to Table 10.7.

Year Three-year Five-year Seven-year

1 33.33% 20.00% 14.29%

2 44.45% 32.00% 24.49%

3 14.81% 19.20% 17.49%

4 7.41% 11.52% 12.49%

5 11.52% 8.93%

6 5.76% 8.92%

7 8.93%

8 4.46%

Aftertax salvage value $_________

Reference no: EM131352320

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