from my recollection SV = MV - BV according to Schweser, its SV = MV - [(MV-BV)T] i assume this is more accurate since the “portion that was used up” was taxed, leaving the a higher and more accurate SV.

I think this is just a matter of it being either the before-tax salvage value or the after-tax salvage value. Think you should just stick with what is given in the CFA curriculum and use the after-tax salvage value

yea. thanks!

If you’re calculating salvage value for the purposes of capital budgeting, use after tax figures. - It’s assumed you sell the asset at the end of the project. This gives you gross proceeds in the amount of MV. - The second term (MV-BV) represents the taxable gain (or loss) on the sale of the asset in question. - This results in tax liability equal to (MV-BV)*T So, net after-tax proceeds from the sale are MV - (MV-BV)*T In the case of capital budgetting problems, ALL figures are cash flows net of taxes.