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Suppose a firm buys a new machine for $1million. The machine has a life of 10 years. Assume a tax rate of 21%. a. What
Suppose a firm buys a new machine for $1million. The machine has a life of 10 years. Assume a tax rate of 21%. a. What is the salvage value if the firm uses straight line depreciation and sells the machine for $900K in year 5? b. What is the salvage value of the firm uses straight-line depreciation and sells the machine for $200 thousand in year 5? c. What is the salvage value if the firm sells the machine for $1 million in year 5 using accelerated depreciation? Use the MACRS schedule below) year 17.50% 16.50% 13.20% 10.56% 8.45% 6.76% 6.55% 6.55% 6.55% 6.55% 0.83%
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