Problem:
An asset used in a four-year project falls in the five-year MACRS class (MACRS Table) for tax purposes. The asset has an acquisition cost of $7,200,000 and will be sold for $1,760,000 at the end of the project.
Required:
Question: What is the book value of the equipment in Year 4? If the tax rate is 35 percent, what is the aftertax salvage value of the asset?
Note: Please show guided help with steps and answer.