In: Finance
Which of the following is a correct calculation for after-tax salvage value if salvage value and book value differ?
A) Salvage – T(book value – salvage)
B) (Initial cost - Salvage)T – (book value – salvage)
C) Salvage – T(salvage – (initial cost – accumulated depreciation))
D) (Salvage – accumulated depreciation)T – (salvage – book value)
C) Salvage – T(salvage – (initial cost – accumulated depreciation))
Salvage value is the value which will be received when the asset i ssold. Tax will be the difference between salvage value and book value at the time of sale.