Problem 11.9

Zippy Corporation just purchased computing equipment for $16,000. The equipment will be depreciated using a five-year MACRS depreciation schedule. If the equipment is sold at the end of its fourth year for $10,000, what are the after-tax proceeds from the sale, assuming the marginal tax rate is 35 percent.(Round answer to 2 decimal places, e.g. 15.25.)

refer to exhibit below - what is the after tax proceeds?

EXHIBIT 1 1 J MACRS Depreciation Schedules by Allowable Recovery Period The MAC RS schedule lists the tax depreciation rates that firms uise for assets placed into service after the Tax Reform Act of 1936 went into effect. The table indicates the percentage of the cost of the asset that can be depreciated in each year during the period that it is being used. Year 1 is the year in which the asset is first placed into service. Year 3Year 5'Iieral' T'I'ear 1DTear 1 51123: 20?ear 1 33.33911 20.01191: 14.29911 10.011911 5.111111: 3.2516 2 44.45 32.011 24.49 111.00 9% 2.22 3 14.01 19.211 12.411I 14.411 3.55 6.60 4 2.41 11.52 12.411I 11.52 2.2311 6.10 5 11.52 11.95 9.22 693 5.21 6 5.26 11.92 2.3? 623 5.29 2 11.93 655 5.911 4.119 11 4.46 6.55 5.911 4.52 9 6.56 5.91 4.46 10 6.55 5.90 4.46 11 3.211 5.91 4.46 12 5.911 4.46 13 5.91 4.46 14 5.911 4.46 15 5.91 4.46 16 2.95 4.46 1? 4.46 13 4.46 19 4.46 20 4.46 21 2.24 T111111 111100115 1111.011111: 111100115 1111.011115 1111.110111] 100.0096