What is the equipment after-tax salvage value

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Allied Services is now at the end of the final year of a project. The equipment originally cost $45,000, of which 75% has been depreciated. The firm can sell the used equipment today for $12,000, 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 firm will receive a tax credit as a result of the sale.)

Reference no: EM132685106

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