Question: Use the table below to answer this question. MACRS 5-year property Year Rate 1 20.00% 2 32.00% 3 19.20% 4 11.52% 5 11.52% 6 5.76%

Use the table below to answer this question. MACRS 5-year property

Year Rate

1 20.00%

2 32.00%

3 19.20%

4 11.52%

5 11.52%

6 5.76%

Ronnie's Custom Cars purchased some fixed assets two years ago for $40,000. The assets are classified as 5-year property for MACRS. Ronnie is considering selling these assets now so he can buy some newer fixed assets which utilize the latest in technology. Ronnie has been offered $22,000 for his old assets. What is the net cash flow from the salvage value if the tax rate is 34 percent?

$18,436.80

$16,870.08

$22,000.00

$19,200.00

$21,048.00

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