Problem:
Consider an asset that costs $264,000 and is depreciated straight-line to zero over its 13-year tax life. The asset is to be used in a 6-year project; at the end of the project, the asset can be sold for $33,000.
Required:
If the relevant tax rate is 34 percent, what is the after-tax cash flow from the sale of this asset? Hint: If sold at a loss, taxes will be negative, so ATSV = selling price - taxes on gain, would result in subtracting negative taxes.
- $73,617.93
- $70,112.31
- $21,780.00
- $672,552.00
- $66,606.69
Note: Please provide full description.