How much does the firm pay or save in taxes

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Reference no: EM132018392

A firm purchases a new machine for $192,000. It borrows $76,800 at 3.7% annual interest to be repaid in 2 years. The machine is depreciated using a 5-year MACRS. At the end of 3 years, the firm sells the machine for $84,000. The firm's tax rate is 33%. How much does the firm pay or save in taxes from selling this machine at the end of 3 years? In other words, what is the gains or loss?

Reference no: EM132018392

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