Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Your firm needs a computerized machine tool lathe which costs $43,000 and requires $11,300 in maintenance for each year of its 3- year life.

image text in transcribed

Your firm needs a computerized machine tool lathe which costs $43,000 and requires $11,300 in maintenance for each year of its 3- year life. After three years, this machine will be replaced. The machine falls into the MACRS 3-year class life category, and neither bonus depreciation nor Section 179 expensing can be used. Assume a tax rate of 21 percent and a discount rate of 13 percent. If the lathe can be sold for $4,300 at the end of year 3, what is the after-tax salvage value? Note: Round your answer to 2 decimal places. Answer is complete but not entirely correct. Salvage value after tax $ 2,664.00 X

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Markets and Institutions

Authors: Anthony Saunders, Marcia Cornett

6th edition

9780077641849, 77861663, 77641841, 978-0077861667

More Books

Students also viewed these Finance questions