Problem:
Consider an asset that costs $228,800 and is depreciated straight-line to zero over its 14-year tax life. The asset is to be used in a 7-year project; at the end of the project, the asset can be sold for $28,600.
Required:
Question: If the relevant tax rate is 31 percent, what is the aftertax cash flow from the sale of this asset?
Note: Show all workings.