Work refers to any useful activity.
The 4-year term instrument's nominal rate is higher than the 2-year term instrument's nominal rate.
What is nominal rate?
The increase in payment you make to the lender for using the borrowed funds is known as the nominal interest rate.
The rate of compounding is higher for 2-year investments than for 4-year investments, which are compounded semi-annually.
As a result, option (b) is correct.
Learn more about on nominal rate, here:
brainly.com/question/13324776
#SPJ1
Answer:
d) $677,532.
Explanation:
1.
Written down value of the equipment after 4 years = Cost x ( 100% - 1st year MACRS - Second-year MACRS - Third-year MACRS - Fourth-year MACRS ) = $3,500,000 x ( 100% - 20% - 32% - 19.20% - 11.52% ) = $604,800
2.
Now calculate the gain on the sale of equipment
Gain on the sale of equipment = Sale Price - Written down Value after 4 years = $715,000 - $604,800 = $110,200
3.
Tax owed = Gain on the sale x Tax rate = $110,200 x 34% = $37,468
After-tax salvage value = Sales price - Tax = $715,000 - $37,468 = $677,532