What is the after-tax salvage value

Reference no: EM13263425

Your firm needs a computerized tool lathe which costs $50,000, requires $10,000 in installation and another $12,000 in maintenance for each of 3 year life. After 3 years this machine will be replaced. The machine falls into the MACRS 3 year class life category. Assume a tax rate of 30% and a discount rate of 12%. If the lathe can be sold for$7,000 at the end of year 3, what is the afte-tax salvage value?

Reference no: EM13263425

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