Your firm needs a computerized machine tool lathe which costs $47,000 and requir

Question

Your firm needs a computerized machine tool lathe which costs $47,000 and requires $11,700 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 11 percent. If the lathe can be sold for $4,700 at the end of year 3, what is the after-tax salvage value? (Round your answer to 2 decimal places.) MACRS Depreciation Normal Recovery Period Year 3 5 7 10 1 33.33% 20.00% 14.29% 10.00% 2 44.45 32.00 24.49 18.00 3 14.81 19.20 17.49 14.40

Explanation / Answer

After-tax cash flows(AT CF) = Book Value+Market Value-Book Value(1-Tc

Related Questions

Navigate

• Browse (All)
• Browse Y
• Subjects

---

---

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