What is the aftertax salvage value of the asset

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The asset used in a four-year project falls in the five-year MACRS class for tax purposes. The asset has an acquisition cost of $4,900,000 and will be sold for $1,450,000 at the end of the project. If the tax rate is 22 percent, what is the aftertax salvage value of the asset? See Table 10.7 below.

Year Three-Year Five Year Seven year

1 33.33% 20% 14.29%

2 44.45 32 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

Reference no: EM132404607

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