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Homework: Chapter 7 - Depreciation & After-Tax Analysis Save Score: 0 of 1 pt 5 of 7 (0 complete) HW Score: 0%, 0 of 7 pts Problem 7-19 (algorithmic) Question Help A company purchases an industrial laser for $123,000. The device has a useful life of 4 years and a salvage value (market value) at the end of those four years of $60,000. The before-tax cash flow is estimated to be $90,000 per year. a. You, of course, suggested applying the 3-year MACRS (GDS) method instead of the straight-line method. Given an effective tax rate of 26%, determine the depreciation schedule and the after tax cash flow. b. Based on the MACRS depreciation schedule for this asset, if the industrial laser was sold for $100,000 in year two (consider year two to be the "year 2" row in the table in Part (a), what will be the amount of gain (depreciation recapture) or loss on the disposal of the asset at the end of this year? Click the icon to view the GDS Recovery Rates (r) for the 3-year property class a. Determine the MACRS depreciation amounts and the after tax cash flow for this laser. Fill in the table below. (Round to the nearest dollar.) EOY Depreciation, $ ATCF, $ - 123,000 Enter your answer in the edit fields and then click Check Answer. ECONOMICS > Assignments > Chapter 7 - Del Search... Eer 7 - Depreciation & After-Tax Analysis ering Economics (1) nework: Chapter 7 - Depreciation & =r-Tax Analysis O of 1 pt HW Score: 0%, 5 of 7 (0 complete) More Info 0.0590 0.0591 0.0590 0.0591 0.0295 0.0446 0.0446 0.0446 0.0446 0.0446 0.0446 0.0446 0.0446 0.0446 0.0223 19 20 21 "These rates are determined by applying the 200% DB method (with switchover to the SL method) to the recovery period with the half-year convention applied to the first and last years. Rates for each period must sum to 1.0000 "These rates are determined with the 150% DB method instead of the 200% D8 method (with switchover to the SL method) and are rounded off to four decimal places Print Done]