Book value as on date of sale=Cost-Accumulated
Depreciation
=18*(1-0.75)=4.5 million
Hence gain on sale=5.4-4.5=$0.9 million
Hence after-tax salvage value=Sale proceeds-(gain on sale*Tax rate)
=5.4-(0.9*0.4) million
=$5,040,000
13-2: Analysis of an Expansion Project Problem 13-3 Net Salvage Value Allen Air Lines must liquidate...
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