Question

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Answer 1

Hi, please find below the solution.. please provide rating..

Marcs depreciation table using 5 year
Year	Rate	Depreciation	Accumulated Depreciation	Book Value
0		$0.00	$0.00	$7,300,000.00
1	20.00%	$1,460,000	$1,460,000	$5,840,000
2	32.00%	$2,336,000	$3,796,000	$3,504,000
3	19.20%	$1,401,600	$5,197,600	$2,102,400
4	11.52%	$840,960	$6,038,560	$1,261,440
5	11.52%	$840,960	$6,879,520	$420,480
6	5.76%	$420,480	$7,300,000	$0
we can see carry value / Book value at the end of year 4 =						$1,261,440
Computation of after tax salvage value
Sales price =						1,640,000
Less : book value at the end of 4th year =						(1,261,440)
Profit on sale of asset						378,560
tax on profit @ 35%						132,496
Post tax salvage value = Sales price - Tax on profit = 1640000-132496						1,507,504
Therefore answer =			1,507,504