An asset used in a 4-year project falls in the 5-year MACRS class, for tax purposes. The asset has an acquisition cost of $22,302,334 and will be sold for $5,717,194 at the end of the project. If the tax rate is 0.37, what is the aftertax salvage value of the asset (SVNOT)? TABLE 9.7 Modified ACRS depreciation allowances Year 1 2 3 4 5 6 7 3-Year 33.33% 44.45 14.81 7.41 Property Class 5-Year 20.00% 32.00 19.20 11.52 11.52 5.76 7-Year 14.29% 24.49 17.49 12.49 8.93 8.92 8.93 446
An asset used in a 4-year project falls in the 5-year MACRS class, for tax purposes. The asset has an acquisition cost of $22,302,334 and will be sold for $5,717,194 at the end of the project. If the tax rate is 0.37, what is the aftertax salvage value of the asset (SVNOT)? TABLE 9.7 Modified ACRS depreciation allowances Year 1 2 3 4 5 6 7 3-Year 33.33% 44.45 14.81 7.41 Property Class 5-Year 20.00% 32.00 19.20 11.52 11.52 5.76 7-Year 14.29% 24.49 17.49 12.49 8.93 8.92 8.93 446
Chapter9: Capital Budgeting And Cash Flow Analysis
Section9.A: Depreciation
Problem 2P
Related questions
Question
![An asset used in a 4-year project falls in the 5-year MACRS class, for tax purposes. The asset has
an acquisition cost of $22,302,334 and will be sold for $5,717,194 at the end of the project. If the
tax rate is 0.37, what is the aftertax salvage value of the asset (SVNOT)?
TABLE 9.7
Modified ACRS depreciation allowances
Year 3-Year
1
33.33%
44.45
14.81
7.41
2345678
Property Class
5-Year
20.00%
32.00
19.20
11.52
11.52
5.76
7-Year
14.29%
24.49
17.49
12.49
8.93
8.92
8.93
4.46](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F19122459-4c3e-4ffe-b0bd-47f6ec5be5ee%2F471bfd58-280c-4fca-a216-5cfa95bdba53%2Flyxluu_processed.jpeg&w=3840&q=75)
Transcribed Image Text:An asset used in a 4-year project falls in the 5-year MACRS class, for tax purposes. The asset has
an acquisition cost of $22,302,334 and will be sold for $5,717,194 at the end of the project. If the
tax rate is 0.37, what is the aftertax salvage value of the asset (SVNOT)?
TABLE 9.7
Modified ACRS depreciation allowances
Year 3-Year
1
33.33%
44.45
14.81
7.41
2345678
Property Class
5-Year
20.00%
32.00
19.20
11.52
11.52
5.76
7-Year
14.29%
24.49
17.49
12.49
8.93
8.92
8.93
4.46
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