Homework Answers
E. $528,000
Annual depreciation = $2,700,000 / 8 = $337,500
Book value = $2,700,000 - (6 * $337,500) = $675,000
Tax refund (due) = ($675,000 − $430,000)(0.40) = $98,000
Aftertax salvage value = $430,000 + $98,000 = $528,000
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