When compiling the relevant cash flows for a project, the after-tax value of any asset sold...
When compiling the relevant cash flows for a project, the after-tax value of any asset sold any time during the life of the project should be treated as a
- cash flow in the year of sale
-change in net working capital
-cash flow in the last year of the project
- reduction in the cash flow for Time 0
- cash outflow at Time 0
Homework Answers
Solution :-
The Correct answer is (A)
the relevant cash flows for a project, the after-tax value of any asset sold any time during the life of the project should be treated as a cash flow in the year of sale
As we need to calculate present value of the cash flows so we need the year of sale in which cash comes
If there is any doubt please ask in comments
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When compiling the relevant cash flows for a project, the
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Consider an asset that costs $635,000 and is depreciated straight-line to zero over its eight-year tax life. The asset is to be used in a five-year project; at the end of the project, the asset can be sold for $125,000. If the relevant tax rate is 35.00%, what is the aftertax cash flow from the sales of this asset?
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