8 years ago, a new machine cost $7,000,000 to purchase and an additional $540,000 for the installation. The machine was to be linearly depreciated to zero over 10 years.

The company has just sold the machine for $4,200,000, and its marginal tax rate is 25%.

Intro 8 years ago, a new machine cost $7,000,000 to purchase and an additional $540,000 for the installation. The machine was to be linearly depreciated to zero over 10 years. The company has just sold the machine for $4,200,000, and its marginal tax rate is 25%. Attempt 1/5 for 10 pts. Part 1 What is the annual depreciation? 754000 Correct Initial book value: BV = Purchase price + Cost of installation = 7,000,000 + 540,000 = 7,540,000 Annual depreciation: D = BV%/N = 7,540,000 / 10 = 754,000 IB Attempt 1/5 for 10 pts. Part 2 What is the current book value? 1508000 Correct Accumulated depreciation: AD = Number of years since purchase * Annual depreciation = 8* 754,000 = 6,032,000 Remaining book value: BV: = BVO - AD = 7,540,000 -6,032,000 = 1,508,000 IB Attempt 4/5 for 10 pts. Part 3 What is the after-tax salvage value? 0+ decimals Submit