Value of the asset
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Calculate the value of the asset given the following information:
Asset invoice $1,500,000
Cost of capital 15%
Cash flow (YR 1) $350,000
Cash flow (YR 2) $500,000
Cash flow (YR 3) $720,000
Salvage value (end of YR 3) $750,000
Remaining depreciation (end of YR 3) $600,000
Tax rate 40%.
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Solution Summary
Response helps in calculating the value of the asset
Solution Preview
See the attached file.
Year Cash flow
0 -1500000
1 350000
2 $500,000
3 $1,530,000 (Salvage value has been added to the year 3 ...
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