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Assume the tax rate is 25%. If an asset (a vehicle with a useful life of...

Assume the tax rate is 25%. If an asset (a vehicle with a useful life of 5 years) has a book value of $8,000 and it sold for $10,000. The net salvage CF is:

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Answer #1
The net salvage CF = Sales value - ((Sales Value-Book Value)*Tax Rate)
= $       10,000 - ((10000-8000)*25%)
= $       10,000 - $        500
= $         9,500
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