Question
A machine was purchased for $500,000 and had an installation cost of $20,000 and shipping charges of $5,000. It belongs to the MACRS 5 year
A machine was purchased for $500,000 and had an installation cost of $20,000 and shipping charges of $5,000. It belongs to the MACRS 5 year class for depreciation purposes.
What is the after-tax salvage value of the machine at the end of year 4?
(Round to the nearest dollar and do not enter a dollar sign)
Assume salvage of $100,000 and tax rate of 21%.
Use
Table 13.1 MACRS Depreciation Schedule
| Year | Class | |||
| 3 years | 5 years | 7 years | 10 years | |
| 1 | 41.67% | 25.00% | 17.85% | 12.50% |
| 2 | 38.89% | 30.00% | 23.47% | 17.50% |
| 3 | 14.14% | 18.00% | 16.76% | 14.00% |
| 4 | 5.30% | 11.37% | 11.97% | 11.20% |
| 5 | 11.37% | 8.87% | 8.96% | |
| 6 | 4.26% | 8.87% | 7.17% | |
| 7 | 8.87% | 6.55% | ||
| 8 | 3.34% | 6.55% | ||
| 9 | 6.56% | |||
| 10 | 6.55% | |||
| 11 | 2.46% | |||
| Total | 100.00% | 100.00% | 100.00% | 100.00% |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Money Banking And Financial Markets
Authors: Stephen G. Cecchetti
2nd International Edition
0071287728, 9780071287722
