Consider an asset that costs $396,000 and is depreciated straight-line to zero o
ID: 2708437 • Letter: C
Question
Consider an asset that costs $396,000 and is depreciated straight-line to zero over its 9-year tax life. The asset is to be used in a 4-year project; at the end of the project, the asset can be sold for $49,500.
If the relevant tax rate is 30 percent, what is the aftertax cash flow from the sale of this asset? (Do not round your intermediate calculations.)
Required :If the relevant tax rate is 30 percent, what is the aftertax cash flow from the sale of this asset? (Do not round your intermediate calculations.)
Explanation / Answer
aftertax cash flow from the sale of this asset =49,500 -(49,500)*30%=34650.00
$34,650.00