Question
Purple Haze Machine Shop is considering a four-year project to improve its production efficiency. Buying a new machine press for $594,319 is estimated to result
Purple Haze Machine Shop is considering a four-year project to improve its production efficiency. Buying a new machine press for $594,319 is estimated to result in $225,452 in annual pretax cost savings. The press falls in the MACRS five-year class, and it will have a salvage value at the end of the project of $97,833. The shop's tax rate is 32 percent. What is the after tax salvage value of this asset? (Round your final answer to the nearest dollar amount. Omit the "$" sign and commas in your response. For example, $123,456.78 should be entered as 123457.)
Modified ACRS Depreciation Allowances (Table 10.7) | |||
Year | Three-Year | Five-Year | Seven-Year |
1 | 33.33% | 20.00% | 14.29% |
2 | 44.45 | 32.00 | 24.49 |
3 | 14.81 | 19.20 | 17.49 |
4 | 7.41 | 11.52 | 12.49 |
5 | 11.52 | 8.93 | |
6 | 5.76 | 8.92 | |
7 | 8.93 | ||
8 | 4.46 |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started