Marshall-Miller & Company is considering the purchase of a new machine for $50,000, installed. The machine has a tax life of 5 years, and it can be depreciated according to the depreciation rates below. The firm expects to operate the machine for 4 years and then to sell it for $12,500. If the marginal tax rate is 40%, what will the after-tax salvage value be when the machine is sold at the end of Year 4? $$\begin{array} { c c }
\text { Year } & \text { Depreciation Rate } \
\hline 1 & 0.20 \
2 & 0.32 \
3 & 0.19 \
4 & 0.12 \
5 & 0.11 \
6 & 0.06
\end{array}$$
A) $ 8,878
B) $ 9,345
C) $ 9,837
D) $10,355
E) $10,900

Question

Marshall-Miller & Company is considering the purchase of a new machine for $50,000, installed. The machine has a tax life of 5 years, and it can be depreciated according to the depreciation rates below. The firm expects to operate the machine for 4 years and then to sell it for $12,500. If the marginal tax rate is 40%, what will the after-tax salvage value be when the machine is sold at the end of Year 4? $$\begin{array} { c c } 
\text { Year } & \text { Depreciation Rate } \
\hline 1 & 0.20 \
2 & 0.32 \
3 & 0.19 \
4 & 0.12 \
5 & 0.11 \
6 & 0.06
\end{array}$$
A) $ 8,878
B) $ 9,345
C) $ 9,837
D) $10,355
E) $10,900

Quizplus · Accepted Answer

The Answer of Marshall-Miller & Company is considering the purchase of a new machine for $50,000, installed. The machine has a tax life of 5 years, and it can be depreciated according to the depreciation rates below. The firm expects to operate the machine for 4 years and then to sell it for $12,500. If the marginal tax rate is 40%, what will the after-tax salvage value be when the machine is sold at the end of Year 4? $$\begin{array} { c c } 
\text { Year } & \text { Depreciation Rate } \
\hline 1 & 0.20 \
2 & 0.32 \
3 & 0.19 \
4 & 0.12 \
5 & 0.11 \
6 & 0.06
\end{array}$$
A) $ 8,878
B) $ 9,345
C) $ 9,837
D) $10,355
E) $10,900

Marshall-Miller & Company Is Considering the Purchase of a New