Question 1 1 pts Purple Haze Machine Shop is considering a four-year project to

Question

Question 1 1 pts Purple Haze Machine Shop is considering a four-year project to improve its production efficiency. Buying a new machine press for $547507 is estimated to result in $223913 in annual pretax cost savings. The press falls in the MACRS five-year class, and it will have a salvage value at the end of the project of $105859. The shop's tax rate is 32 percent. What is the after tax salvage value of this asset? (Round your final answer to the nearest dollar amount. Omit the "$" sign and commas in your response. For example, $123,456.78 should be entered as 123457.) Modified ACRS Depreciation Allowances (Table 10.7) Year Three-Year Five-Year Seven-Year 33.33% 44.45 14.81 7.41 20.00% 32.00 19.20 11.52 11.52 5.76 14.29% 24.49 17.49 12.49 8.93 8.92 8.93 4.46 2 4

Explanation / Answer

Asset cost $    547,507 Less: Depreciation charged $    452,898 547507*(0.2+0.32+0.192+0.1152) Book value of assets $      94,609 Sale value of machine $    105,859 Profit/(Loss) on sale $      11,250 Less: Tax @ 32% $         3,600 After tax salvage value of asset $    102,259

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