Moore & Moore (MM) is considering the purchase of a new machine for $50,000, ins

Question

Moore & Moore (MM) is considering the purchase of a new machine for $50,000, installed. MM will use the MACRS accelerated method to depreciate the machine, which is classified as 5-year property (see the following MACRS table for depreciation rates). MM expects to sell the machine at the end of its 4-year operating life for $10,000. If MM's marginal tax rate is 40%, what will the after-tax cash flow be when it disposes of the machine at the end of Year 4?

Ownership Year Depreciation Rate
1 20%
2 32
3 19
4 12
5 11
6 6

a. $7,656
b. $8,059
c. $8,484
d. $8,930
e. $9,400

Explanation / Answer

c. $8,484

Related Questions

Navigate

• Browse (All)
• Browse M
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.