What is the after-tax salvage value of a 3-year MACRS machine with the $10,000 purchase price if it is sold after 3 years at a salvage value of $500? The annual depreciation rates are 33.33%, 44.45%, 14.81%, and 7.41%, and the tax rate is 25%.

Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter13: Capital Budgeting: Estimating Cash Flows And Analyzing Risk
Section: Chapter Questions
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Question 5
What is the after-tax salvage value of a 3-year MACRS machine with the $10,000
purchase price if it is sold after 3 years at a salvage value of $500? The annual
depreciation rates are 33.33%, 44.45%, 14.81%, and 7.41%, and the tax rate is 25%.
$741
$560.25
$935.25
-$241
O-$60.25
Transcribed Image Text:Question 5 What is the after-tax salvage value of a 3-year MACRS machine with the $10,000 purchase price if it is sold after 3 years at a salvage value of $500? The annual depreciation rates are 33.33%, 44.45%, 14.81%, and 7.41%, and the tax rate is 25%. $741 $560.25 $935.25 -$241 O-$60.25
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