Your firm needs a computerized machine tool lathe which costs $59,000 and requires $12,900 inmaintenance for each year of its 3-year life. After three years, this machine will be replaced. Themachine falls into the MACRS 3-year class life category, and neither bonus depreciation norSection 179 expensing can be used. Assume a tax rate of 21 percent and a discount rate of 12percent.If the lathe can be sold for $5,900 at the end of year 3, what is the after-tax salvage value?Note: Round your answer to 2 decimal places.Answer is complete but not entirely correct.Salvage value after tax$5,380.45

After-tax salvage value pertains to the residual value of an asset once the taxes applicable to its…

Answered: Your firm needs a computerized machine…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter9: Capital Budgeting And Cash Flow Analysis

Section: Chapter Questions

Problem 5P

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