Compare salvage values, Compare salvage values of $400K and

Compare salvage values

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Reference no: EM131810156

Smith [see References; pp. 161-163] showed that after taxes, a low salvage value can be better than a high one. To confirm this, calculate the EAC after taxes for a machine costing $500K. Compare salvage values of $400K and $0 after a life of 30 years. Use straight-line depreciation, an interest rate of 10%, and a tax rate of 40%.

Reference no: EM131810156

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