(SOLVED) Power Manufacturing has equipment that it purchased 6 years ago for $2,700,000.
Power Manufacturing has equipment that it purchased 6 years ago for $2,700,000. The equipment was used for a project that was intended to last for 8 years and was being depreciated over the life of the project.
However, due to low demand, the project is being shut down. The equipment was depreciated using the straight-line method and can be sold for $430,000 today. The company's tax rate is 40 percent.
The aftertax salvage value of the equipment is $______.
Expert Solution Preview
Annual depreciation=(Cost-Residual value)/Useful life
Hence book value as on date of sale=Cost-Accumulated depreciation