RWJ 7th Edition Solutions - Colby College

Notice that the costs are positive, which represents a cash inflow. The costs are positive in this case since the new computer will generate a cost savings. The only initial cash flow for the new computer is cost of $780,000. We next need to calculate the aftertax salvage value, which is: Aftertax salvage value = $140,000(1 – .38) = $86,800 ................
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