TNOCF Q5 book 3, pg 73

[pepp]

When calculating the terminal non operating cash flow,
why doesn’t the salvage value of the asset gets taxed at the tax rate?
Tax rate = .4
Salvage value = 21
wc inv = 8
book value of the asset is 15 mil.
Then shouldn’t TNOCF = 21*.6 + 8 - .4*(21-15) instead book is displaying 21 + 8 - .4*(21-15)

 

[pepp]

I guess it should be as follows to avoid double counting:
21*.6 + 8 + .4*15

 

[bpdulog]

Well the formula for TNOCF is =
SalT + WC - (SalT - BV at T)*Tax