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Sum Grading Problem 13-03 13-2: Analysis of an Expansion Project Problem 13-3 et Salvage Value n can be sold today for $5 mil
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Answer #1

Book value = Initial cost (1 - 85%)

Book value = 17,000,000 (1 - 85%)

Book value = 2,550,000

After tax salvage value = 5,100,000 - 0.4(5,100,000 - 2,550,000)

After tax salvage value = 5,100,000 - 1,020,000

After tax salvage value = 4,080,000

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