Question: Your firm needs a computerized machine tool lathe which costs $50,000, requires $10,000 in installation and another $12,000 in maintenance for each year of its

Your firm needs a computerized machine tool lathe which costs $50,000, requires $10,000 in installation and another $12,000 in maintenance for each year of its 3-year life. After 3 years, this machine will be replaced. The machine falls into the MACRS 3-year class life category. Assume a tax rate of 30% and a discount rate of 12%. If the lathe can be sold for $7,000 at the end of year 3, what is the after-tax salvage value?

	$6,233.80
	$6,311.90
	$5,927.20
	$6,154.20

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