Question 4: (1 point)
Wedge Corporation uses a discount rate of 14% and has a tax rate of 30%. The following cash flows occur in the last year of a 15-year equipment selection investment project:
Cost savings for the year $183,000
Working capital released $123,000
Salvage value from sale of equipment $30,000
At the end of the fifteen years when the equipment is sold, its net book value for tax purposes is zero. The total after-tax present value of the cash flows above is closest to:
This provides the steps to calculate the total after-tax present value of the cash flows.