Question
The J. Harris Corporation is considering selling one of its old assembly machines. The machine, purchased for $30,000 five years ago, had an expected life
The J. Harris Corporation is considering selling one of its old assembly machines. The machine, purchased for $30,000 five years ago, had an expected life of 10 years and an expected salvage value of zero. Assume Harris uses simplified straight-line depreciation, creating depreciation of $3,000 per year, and could sell this old machine for $35,000 Also assume a 34 percent marginal tax rate. (a). What would be the tax associated with this sale? (b). If the old machine were sold for $25,000 what would be the taxes associated with this sale? ( c ). If the old machine were sold for $15,000 what would be the taxes associated with the sale? (d). If the old machine were sold
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