Salvage Value and After-Tax Cash Inflow: Understanding the Calculation

The salvage value of an asset creates an after-tax cash inflow to the firm in an amount equal to the:

A. sales price plus the tax due based on the book value minus the sales price.

B. sales price minus the tax due based on the sales price minus the book value.

C. 'sales price minus the book value'.

D. sales price plus the tax due based on the sales price minus the book value.

E. sales price of the asset.

C 'sales price minus the book value'.