Edward's Manufactured Homes purchased some machinery 2 years ago for $49,000. The assets are classified as 5-year property for MACRS. The company is replacing this machinery today with newer machines that utilize the latest in technology. The old machines are being sold for $16,000 to a foreign firm for use in its production facility in South America. What is the aftertax salvage value from this sale if the tax rate is 34 percent?

MACRS 5-year property

Year

Rate

1

20.00%

2

32.00%

3

19.20%

4

11.52%

5

11.52%

6

5.76%

	$15,358.08
	$23,520.00
	$18,556.80
	$16,000.00
	$17,579.41

A project will produce an operating cash flow of $14,600 a year for 8 years. The initial fixed asset investment in the project will be $48,900. The net aftertax salvage value is estimated at $11,000 and will be received during the last year of the project's life. What is the net present value of the project if the required rate of return is 12 percent?

	$23,627.54
	$28,070.26
	$34,627.54
	$39,070.26
	$41,040.83