What is the equipment after tax salvage value

Assignment Help Financial Management

Reference no: EM132030333

1. Which of the following is/are true for a stock with beta equal to 1.5 (Select the best choice below.)

I) The stock has a? 50% higher expected return than the market portfolio.

II) Given a market risk premium of? 10%, the expected return on the stock would be? 15%.

III) The stock has? 50% more systematic risk than the average stock.

A. I only

B. II only

C. III only

D. I and III only

E. I, II and III

2. A firm purchases equipment for a capital budgeting project. The equipment cost $1,900,000 and its useful life is 8 years. The equipment is expected to be sold for $500,000 at the end of the project's 7 year life. The tax rate is 32%. What is the equipment's after tax salvage value?

$340,000

$253,143

$501,500

$416,000

Reference no: EM132030333

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