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1. Calculating Salvage Value

Consider an asset that costs $299,200 and is depreciated straight-line to zero over its 5-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 $37,400. Required : If the relevant tax rate is 32 percent, what is the aftertax cash flow from the sale of this asset? (Do not round your intermediate calculations.)

a. $60,543.12

b. $25,432.00

c. $240,868.00

d. $63,729.60

e. $66,916.08

2. An automobile dealership offers a car with? $0 down? payment, $0 first? month's payment, and? $0 due at signing. The monthly? payment, starting at the end of month? two, is ?$350 and there are a total of 37 payments. Assume that the APR is 11?% compounded monthly. Find the negotiated sales prices.

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92712296

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