ABC Company must purchase a new milling machine. The purchase price is $50,000, and the shipping cost is $10,000. In addition, $5,000 NWC is required if the machine is in used. The machine has a tax life of 5 years and uses a 5-year class MACRS depreciation method. The firm expects to operate the machine for 3 years and then to sell it for $13,500. If the marginal tax rate is 30%, what will the after-tax salvage value be when the machine is sold at the end of Year 3?

Year Depreciation Rate

1 0.20

2 0.32

3 0.19

4 0.12

5 0.11

6 0.06