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What will the after-tax salvage value

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Question - You just purchased some equipment that is classified as 5-year property for MACRS. The equipment costs $87,600. What will the after-tax salvage value of this equipment be at the end of three years should you decide to resell the equipment for $50,000 at that point in time (assume a corporate tax rate of 35%)?

Year 1: Rate 10%

Year 2: 18%

Year 3: 14.4%

Year 4: 11.52%

Year 5: 9.22%

Year 6: 7.37%

Year 7: 6.55%

Year 8: 6.55%

Year 9: 6.56%

Year 10: 6.55%

Year 11: 3.28%

Reference no: EM133042123

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