Liberty Services is now at the end of the final year of a project. The equipment originally cost $125,500, of which 75% has been depreciated. The firm can sell the used equipment today for $36,000, and its tax rate is 30%. What is the equipment’s after–tax salvage value for use in capital budgeting analysis?
Book value as on date of sale=Cost-Accumulated Depreciation
=125500*(1-0.75)=31375
Hence gain on sale=36,000-31375=$4625
Hence after-tax salvage value=Sale proceeds-(gain on sale*Tax rate)
=36,000-(4625*0.3)
=$34612.5
Liberty Services is now at the end of the final year of a project. The equipment originally cost $125,500, of which 75%...
Liberty Services is now at the end of the final year of a project. The equipment originally cost $125,500, of which 75% has been depreciated. The firm can sell the used equipment today for $52,000, and its tax rate is 30%. What is the equipment’s after–tax salvage value for use in capital budgeting analysis?
D | Question 12 5 pts Liberty Services is now at the end of the final year of a project. The equipment originally cost $125,500, of which 75% has been depreciated. The firm can sell the used equipment today for $52,000, and its tax rate is 30%, what is the equipment's after- tax salvage value for use in capital budgeting analysis? Enter your answer rounded to two decimal places. Do not enter $or comma in the answer box. For example,...
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Liberty Services is now at the end of the final year of a project. The equipment was purchased prior to the new tax law and originally cost $20,000, of which 75% has been depreciated. The firm can sell the used equipment today for $6,000, and its tax rate is 25%. What is the equipment's after-tax salvage value for use in a capital budgeting analysis? Note that if the equipment's final market value is less than its book value, the firm...
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