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5. (18 points) Kidv, Inc, is considering replacing its old VPX machine with a new model. The tax basis of its existing machine is $14,842.91.
5. (18 points) Kidv, Inc, is considering replacing its old VPX machine with a new model. The tax basis of its existing machine is $14,842.91. KidV cam sell its old VPX machine for S16,500 now. In four years, KidV will be able to sell its old VPX machine for $9,300. If KidV keeps its old VPX machine, its deprecia over the next four years is (1 year) $1,100, (2-years) $890, (3 years) S730, and (four years) $610. Kidvs marginal tax rate is 21%. (a) If KidV sells its old VPX machine now, what will be KidV's tax salvage value on this machine? (b) If KidV keeps its old VPX machine for the next four years and then sells it, what will be its after-tax salvage value then
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