Talia's Tutus bought a new sewing machine for $40,000 that will be depreciated using the MACRS depreciation

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Talia's Tutus bought a new sewing machine for $40,000 that will be depreciated using the MACRS depreciation schedule for a 5-year recovery period.

a. Find the depreciation charge each year.

b. If the sewing machine is sold after 3 years for $22,000, what will be the after-tax proceeds on the sale if the firm's tax bracket is 35%?

Talia's Tutus bought a new sewing machine for $40,000 that

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Fundamentals of Corporate Finance

ISBN: 978-0078034640

7th edition

Authors: Richard Brealey, Stewart Myers, Alan Marcus

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Question Posted: Sep 27, 2016 10:41 AM

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Talia's Tutus bought a new sewing machine for $40,000 that will be depreciated using the MACRS depreciation

Question:

Sewing machine cost Recovery period3 Sold after (b) Selling price Tax rate S40,000.00 5.00 years 3.00 years $22,000.00 35.00%

Step by Step Answer:

Given data Sewing machine cost 4000000 Recovery period 500 years Sol...View the full answer

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