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Littau Inc

Question 11

Multiple Choice

Littau Inc. has provided the following data concerning an investment project that has been proposed: Littau Inc. has provided the following data concerning an investment project that has been proposed: The company's tax rate is 30%. For tax purposes, the entire initial investment will be depreciated over 7 years without any reduction for salvage value. The company uses a discount rate of 19%. -When computing the net present value of the project, what is the after-tax cash flow from the salvage value in the final year? A) $0 B) $3,000 C) $10,000 D) $7,000 The company's tax rate is 30%. For tax purposes, the entire initial investment will be depreciated over 7 years without any reduction for salvage value. The company uses a discount rate of 19%.
-When computing the net present value of the project, what is the after-tax cash flow from the salvage value in the final year?


A) $0
B) $3,000
C) $10,000
D) $7,000

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