Your firm needs a computerized machine tool lathe which costs $45,000 and requir
ID: 2707544 • Letter: Y
Question
Your firm needs a computerized machine tool lathe which costs $45,000 and requires $11,500 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. Assume a tax rate of 34 percent and a discount rate of 12 percent.
If the lathe can be sold for $4,500 at the end of year 3, what is the after-tax salvage value? (Round your answer to 2 decimal places.)
Your firm needs a computerized machine tool lathe which costs $45,000 and requires $11,500 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. Assume a tax rate of 34 percent and a discount rate of 12 percent.
Explanation / Answer
$ 7,800
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