Question: Eastern Inc. purchases a machine for $15,000. This machine qualifies as a five-year recovery asset under MACRS with the fixed depreciation percentages as follows: year

  2. Eastern Inc. purchases a machine for $15,000. This machine qualifies as a five-year recovery asset under MACRS with the fixed depreciation percentages as follows: year 1 = 20.00%; year 2 = 32.00%; year 3 = 19.20%; year 4 = 11.52%. Eastern has a tax rate of 20%. If the machine is sold at the end of four years for $4,000, what is the cash flow from disposal?

    3. a. $3,535.36

    b. $1,408.00

    c. $3,718.40

    d. $2,592.00

  3.  

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