Aftertax cash flow from the sale of asset


Problem:

Consider an asset that costs $878,400 is depreciated straight-line to zero over it's nine-year life. The asset is to be used in a six-year project; at the end of hte project, the asset can be sold for $135,100.

Required:

If the relevant tax rate is 30 percent, what is the aftertax cash flow from the sale of this asset?

Note: Please provide equation and explain comprehensively and give step by step solution.

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Finance Basics: Aftertax cash flow from the sale of asset
Reference No:- TGS0877990

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