What is after-tax salvage value

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The HaveAWonderfulHoliday Company just purchased some equipment that cost $150,000. The asset is in the MACRS 3-year class for depreciation. So the depreciation rates will be .33, .45, .15, and .07 for years 1 through 4, respectively. However it is expected that the asset will be sold in three years. The tax rate for the company is 21%. What is the after-tax salvage value at the end of YEAR 3 if the company receives: a) $15,000 (at the end of year 3) for the asset? b) $ 5,000 (at the end of year 3) for the asset?

Reference no: EM132045986

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