Aberdeen corp is considering a new 4-year project the, Ask an Expert

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Aberdeen Corp is considering a new 4-year project. The initial fixed asset investment is $5.25 million. The fixed asset will be depreciated straight line to $250,000 over 4 years, after which, it will have a market value of $425,000. The project requires an initial investment of $700,000 in NWC, which will be recovered at the end of the project. It will generate $3,400,000 in annual sales, with annual costs of $1,400,000. The tax rate is 40% and the required return is 8%.

What is the aftertax salvage value of the fixed asset?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92399916

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