Consider an asset that costs $492,800 and is depreciated straight-line to zero o
ID: 2753382 • Letter: C
Question
Consider an asset that costs $492,800 and is depreciated straight-line to zero over its 8-year tax life. The asset is to be used in a 3-year project; at the end of the project, the asset can be sold for $61,600.
If the relevant tax rate is 33 percent, what is the aftertax cash flow from the sale of this asset? (Do not round your intermediate calculations.)
rev: 09_18_2012
$142,912.00
$135,766.40
$895,060.00
$41,272.00
$150,057.60
Consider an asset that costs $492,800 and is depreciated straight-line to zero over its 8-year tax life. The asset is to be used in a 3-year project; at the end of the project, the asset can be sold for $61,600.
Explanation / Answer
Therefore, the correct answer is $41,272.
Particulars Amount ($) Sales value of the asset 61,600 Less: Tax at 33% ($61,600*33/100) 20328 After tax cash flow from the same of asset 41,272