What is your initial investment

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Reference no: EM131180462

You are the manager of your own construction company and want to replace an old tractor you had bought seven years ago for $1,200,000. The asset has a useful life of 10 years and has been depreciating on a straight line basis. You purchase a new tractor for $2,500,000. The corporate tax rate is 34%. Assume you are able to sell you told tractor for $650,000. What is your initial investment? Your broker tells you that you are unable to sell the old tractor. What is your initial investment?

Reference no: EM131180462

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