Homework Answers
6). 4th option is the correct option. Tax rate is the rate at which the tax is charged.
7). Book Value after 4 years = Purchase cost of Asset - Accumulated Depreciation
= $150,000 - [$150,000 * (0.20 + 0.32 + 0.192 + 0.1152)]
= $150,000 - [$150,000 * 0.8272]
= $150,000 - $124,080 = $25,920
After-tax Salvage Value = Salvage Value - [Tax Rate * (Salvage Value - Book Value)]
= $40,000 - [0.35 * ($40,000 - $25,920)]
= $40,000 - [0.35 * $14,080]
= $40,000 - $4,928 = $35,072
Hence, 2nd option is correct.
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An asset used in a four-year project falls in the five-year MACRS class for tax purposes....
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An asset used in a four-year project falls in the five-year
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project. If the tax rate is 21 percent, what is the aftertax
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