An in-place machine with $ B = \$165,000 $ was depreciated by using the Modified Accelerated Cost Recovery System (MACRS) over a 3-year period. The machine was sold for \$60,000 at the end of year 2 when the company decided to import the item that required the use of the machine. In year 2, gross income (GI) = \$1 million and operating expenses (OE) = \$500,000. Determine the tax liability in year 2 if $ T_e = 35\% $.The tax liability in year 2 is determined to be \$183,167.95. *[Note: The image includes a text input box with the value 183167.95 and a red symbol with an 'X' beside it.]*

MACRS schedule is :Year1234Depreciation33.33%44.45%14.81%7.41%

Answered: An in-place machine with B= $165,000…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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