Calculate the after tax salvage value

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Reference no: EM132062775

ABC Inc. just purchased some equipment which has a depreciable life of 7 years. The equipment cost $1,720,000 and will be used in a project with a 4 year lifespan. At the end of the project, the equipment will be sold for market value of $450,000 at the end of year 5. The equipment will be depreciated using the straight-line method. Assume the firm has a 30% marginal tax rate and the equipment will be used in a project that last 5 years. Calculate the after tax salvage value. (Round to 2 decimals)

Reference no: EM132062775

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