Consider an asset that costs 510400 and is depreciated strai

Consider an asset that costs $510,400 and is depreciated straight-line to zero over its 11-year tax life. The asset is to be used in a 4-year project; at the end of the project, the asset can be sold for $63,800.

If the relevant tax rate is 31 percent, what is the aftertax cash flow from the sale of this asset? (Do not round your intermediate calculations.)

A.$44,022.00

B.$137,474.50

C.$1,191,158.00

D.$151,945.50

E.$144,710.00

Solution

depreciation annual=510400/11

=46400

book value of the at the end of a 4-year project

=510400-(46400*4)

=324800

what is the aftertax cash flow from the sale of this asset
=63800-(63800-324800)*31%

=144710

the above is answer..