Intro

8 years ago, a new machine cost $5,000,000 to purchase and an additional $590,000 for the installation. The machine was to be linearly depreciated to zero over 20 years.

The company has just sold the machine for $3,000,000, and its marginal tax rate is 25%.

Attempt 1/5 for 10 pts.

Part 1

What is the annual depreciation?

Attempt 1/5 for 10 pts.

Part 2

What is the current book value?

Attempt 1/5 for 10 pts.

Part 3

What is the after-tax salvage value?