Demonstrate what is the after tax salvage value

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Question 1: Your firm needs a machine which costs $230,000, and requires $38,000 in maintenance for each year of its 5 year life. After 3 years, this machine will be replaced. The machine falls into the MACRS 5-year class life category. Assume a tax rate of 30 percent and a discount rate of 13 percent. If this machine can be sold for $23,000 at the end of year 5, what is the after tax salvage value?

Option A) 9274

Option B) 9752

Option C) 16100

Option D) 20074.40

Reference no: EM132518455

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