MACRSDepreciation RateYear 020.00%OA. $19,104OB. $11,520OC. $1,896OD. $9,480Year 132.00%Year 219.20%Year 3Year 411.52% 11.52%Year 55.76%A bakery invests $40,000 in a light delivery truck. This was depreciated using the five-year MACRS schedule shownabove. If the company sold it immediately after the end of year 2 for $21,000, what would be the after-tax cash flow fromthe sale of this asset, given a tax rate of 20%?

Cost of asset = $40,000 The book value of the asset at the end of year 2 is Book…

Answered: MACRS Depreciation Rate Year 0 20.00%…

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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Troy Industries purchased a new machine 2 year(s) ago for $78,000. It is being depreciated under MACRS with a 5-year recovery period using the schedule Recovery year 3 years 5 years 7 years 10 years 1 33% 20% 14% 10% 2 45% 32% 25% 18% 3 15% 19% 18% 14% 4 7% 12% 12% 12% 5 12% 9% 9% 6 5% 9% 8% 7 9% 7% 8 4% 6% 9 6% 10 6% 11 4% Totals 100% 100% 100%…

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