An Asset Used in a 3-Year Project Falls in the Five-Year

question 75

Multiple Choice

An asset used in a 3-year project falls in the five-year MACRS class for tax purposes. The asset has an acquisition cost of $5.4 million and will be sold for $1.2 million at the end of the project. If the tax rate is 35 percent, what is the aftertax salvage value of the asset? Table 9.7 Modified ACRS depreciation allowances

• A) $1,075,680
• B) $780,000
• C) $904,320
• D) $1,324,320
• E) $1,187,560

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