The company will receive a tax credit as a result of sale

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Mikes services is now at the end fo the final year of a project. The equipment orginally cost 22,500 of which 75% has been depreciaed. Mike can sell it today at 6000 and its tax rate is 40%. What is the equipment's after tax salvage value for use in a capital budgeting analysis? Note that if the equipment's final market value is less than its book value, the company will receive a tax credit as a result of the sale.

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Reference no: EM131298168

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The company will receive a tax credit as a result of sale : Mikes services is now at the end fo the final year of a project. The equipment orginally cost 22,500 of which 75% has been depreciaed. Mike can sell it today at 6000 and its tax rate is 40%. What is the equipment's after tax salvage value for use in ..

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