A large wine maker would like to buy new stainless steel containers for aging its wine. It is planning to purchase a number of containers for a total of $540,000. They have 6 years of usable life and lose the same value each year. The wine maker will then sell them in 4 years for an estimated $200,000 to replace with brand new ones at that time. The wine maker falls into a 40% tax rate bracket.

Calculate the after-tax salvage value at the time the containers will get sold.

First, what is the annual depreciation of the containers? [ Select ] ["$50,000", "$80,000", "$85,000", "$90,000", "$107,500"]

Second, what is the remaining book value of the steel containers at the time when they will be sold by the wine maker? [ Select ] ["$180,000", "$255,000", "$300,000", "$320,000", "$430,000"]

Finally, what is the after-tax salvage value of the steel containers? [ Select ] ["$192,000", "$240,000", "$284,250", "$339,500", "$349,400"]

This implies that this is a [ Select ] ["tax savings", "tax liability", "neither one of the two"] for the wine maker.