Your firm needs a machine which costs $60,000, and requires $15,000 in maintenance for each year of its five-year life. After five years, this machine will be replaced. The machine falls into the MACRS five-year class life category. Assume a tax rate of 21 percent and a discount rate of 10 percent. If this machine can be sold for $8,000 at the end of year 5, what is the after-tax salvage value?
A) $3,456.00
B) $4,544.00
C) $5,200.00
D) $7,045.76

Question

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The Answer of Your firm needs a machine which costs $60,000, and requires $15,000 in maintenance for each year of its five-year life. After five years, this machine will be replaced. The machine falls into the MACRS five-year class life category. Assume a tax rate of 21 percent and a discount rate of 10 percent. If this machine can be sold for $8,000 at the end of year 5, what is the after-tax salvage value?
A) $3,456.00
B) $4,544.00
C) $5,200.00
D) $7,045.76

Your Firm Needs a Machine Which Costs $60,000, and Requires