Question: Your firm needs a computerized machine tool lathe which costs $40000 and requires $11,000 in maintenance for each year of its 3-year life. After three

Your firm needs a computerized machine tool lathe which costs $40000 and requires $11,000 in maintenance for each year of its 3-year life. After three years, this machine will be replaced. The machine falls into the MACRS 3-year class life category. Assume a tax rate of 21 percent and a discount rate of 13 percent. If the lathe can be sold for $4000 at the end of year 3, what is the after-tax salvage value? (

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

Your firm needs a computerized machine tool lathe which costs $42,000 and requires $11, 200 in maintenance for each year of its 3-year life. After three years this machine will be replaced The...

Calculate the depreciation tax shield in year 3. Show your work please Your firm needs a computerized machine tool lathe which costs $49,000 and requires $11 ,900 in maintenance for each year of its...

Your firm needs a computerized machine tool lathe which costs $40,000 and requires $11,000 in maintenance for each year of its 3year life. After three years, this machine will be replaced. The...

1. Your firm needs a computerized machine tool lathe which costs $40,000 and requires $11,000 in maintenance for each year of its 3-year life. After three years, this machine will be replaced. The...

Your firm needs a computerized machine tool lathe which costs $40,000 and requires $11,000 in maintenance for each year of its 3year life. After three years, this machine will be replaced. The...

Your firm needs a computerized machine tool lathe which costs $40,000 and requires $11,000 in maintenance for each year of its 3-year life. After three years, this machine will be replaced. The...

ControlYour firm needs a computerized machine tool lathe which costs $ 4 0 , 0 0 0 and requires $ 1 1 , 0 0 0 in maintenance for each year of its 3 - year life. After three years, this machine will...

Your firm needs a computerized machine tool lathe which costs $40,000 and requires $11,000 in maintenance for each year of its 3-year life. After three years, this machine will be replaced. The...

Insurers transfer (cede) risks to reinsurers two different ways, on a pro rata/proportional basis or an excess of loss/non-proportional basis. Suppose an insurer cedes 70% of a $100,000 loss exposure...

Prove that a set with n elements has n(n 1)/2 subsets containing exactly two elements whenever n is an integer greater than or equal to 2.

One way to make ratio analysis more meaningful is to compare the ratios of one firm to those of other firms in the same industry.

A company is preparing completing their Cash Budget. The following data has been prepared for cash receipts and payments. January February March Cash receipts $1,061,200 $1,182,400 $1,091,700 Cash...