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After tax salvage value Kennedy Air Services is now in the final year of a project....

After tax salvage value Kennedy Air Services is now in the final year of a project. The equipment originally cost $25 million, of which 85% has been depreciated. Kennedy can sell the used equipment today for $6.25 million, and its tax rate is 35%. What is the equipment's after-tax salvage value? Round your answer to the nearest cent. Write out your answer completely. For example, 13 million should be entered as 13,000,000.

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Expert Solution

Solution:

The equipment's after-tax salvage value is = $ 5,375,000

Please find the attached screenshot of the excel sheet containing the detailed calculation for the solution.


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