Liberty Services Is Now at the End of the Final

question 57

Multiple Choice

Liberty Services is now at the end of the final year of a project.The equipment originally cost $22,500,of which 75% has been depreciated.The firm can sell the used equipment today for $6,000,and its tax rate is 40%.What is the equipment's after-tax salvage value for use in a capital budgeting analysis? Note that if the equipment's final market value is less than its book value,the firm will receive a tax credit as a result of the sale.

• A)$5,558
• B)$5,850
• C)$6,143
• D)$6,450
• E)$6,772

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Definitions:

Algae

Algae is a broad and diverse group of photosynthetic, usually aquatic, organisms that range from single-celled forms to large seaweeds.

Edicarian

Pertaining to the Ediacaran Period, a geological era from about 635 to 541 million years ago, notable for the first appearance of large, multicellular life forms.

Multicellular Animals

Multicellular animals are organisms composed of multiple cells that perform specialized functions and are capable of complex behaviors compared to unicellular organisms.

Fossils

Preserved remains or impressions of ancient organisms, typically found in sedimentary rock, offering insights into past life on Earth.