An asset purchased by Stratasys, Inc. had a first cost of $70,000 with an expected salvage value

Question:

An asset purchased by Stratasys, Inc. had a first cost of $70,000 with an expected of $10,000 at the end of its 5-year life. In year 2, the revenue was $490,000 with operating expenses of $140,000. If the company's effective tax rate was 36%, determine the difference in taxes paid in year 2 if the depreciation method had been straight line instead of MACRS.

Salvage Value
Salvage value is the estimated book value of an asset after depreciation is complete, based on what a company expects to receive in exchange for the asset at the end of its useful life. As such, an asset’s estimated salvage value is an important...