What will the after-tax salvage value

Reference no: EM13263795

Marshall-Miller & Company is considering the purchase of a new machine for $50,000, installed. The machine has a tax life of 5 years, and it can be depreciated according to the following rates. The firm expects to operate the machine for 4 years and then to sell it for $12,500. If the marginal tax rate is 40%, what will the after-tax salvage value be when the machine is sold at the end of Year 4?

	Depreciation
Year	Rate
1	0.20
2	0.32
3	0.19
4	0.12
5	0.11
6	0.06

Reference no: EM13263795

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