Your company is contemplating the purchase of a large stamping machine. The machine will cost $197,000. With additional transportation and installation costs of $5,000 and $8,000, respectively, the cost basis for depreciation purposes is $210,000. Its MV at the end of five years is estimated as $32,000. The IRS has assured you that this machine will fall under a three year MACRS class life category. The justifications for this machine include $47,000 savings per year in labor and $33,000 savings per year in reduced materials. The before-tax MARR is 13% per year, and the effective income tax rate is 28%. Assume the stamping machine will be used for only three years, owing to the company's losing several government contracts. The MV at the end of year three is $49,000. What is the income tax owed at the end of year three owing to depreciation recapture (capital gain)? Click the icon to view the GDS Recovery Rates (k) for the 3-year property class. III. Choose the correct answer below. OOO A. The income tax owed at the end of year three is $9,363. B. The income tax owed at the end of year three is $5,009. C. The income tax owed at the end of year three is $17,889. D. The income tax owed at the end of year three is $33,439. O E. The income tax owed at the end of year three is $16,000. More info GDS Recovery Rates (mk) Year 3-year Property Class 1 0.3333 2 0.4445 3 0.1481 4 0.0741