Your firm needs a machine which costs $270,000, and requires $42,000 in maintenance for each year of its 3 year life. After 3 years, this machine will be replaced. The machine falls into the MACRS 3-year class life category. Assume a tax rate of 21% and a discount rate of 16%. If this machine can be sold for $27,000 at the end of year 3, what is the after tax salvage value?

Multiple Choice

• $15,806

• $25,531.47

• $6,993.00

• $21,330.00