Marshall-Miller & Company is considering the purchase of a new machine for $50,000, installed. The machine has a tax life of 5 years. Under the new tax law, the machine is eligible for 100% bonus depreciation, so it will be fully depreciated at t = 0. The firm expects to operate the machine for 4 years and then to sell it for $23,700. The marginal tax rate is 25%. When the machine is sold at the end of Year 4, its after-tax salvage value should be $ ___. (Round your answer to the nearest whole number.)
Marshall-Miller & Company is considering the purchase of a new machine for $50,000, installed. The machine has a tax life of 5 years. Under the new tax law, the machine is eligible for 100% bonus depreciation, so it will be fully depreciated at t = 0. The firm expects to operate the machine for 4 years and then to sell it for $23,700. The marginal tax rate is 25%. When the machine is sold at the end of Year 4, its after-tax salvage value should be $ ___. (Round your answer to the nearest whole number.)
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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![Marshall-Miller & Company is considering the purchase of a new machine for $50,000, installed. The machine has a tax life of 5
years. Under the new tax law, the machine is eligible for 100% bonus depreciation, so it will be fully depreciated at t = 0. The firm
expects to operate the machine for 4 years and then to sell it for $23,700. The marginal tax rate is 25%. When the machine is sold
at the end of Year 4, its after-tax salvage value should be $ ___. (Round your answer to the nearest whole number.)](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F69b80be5-d60a-407d-9dc9-8a880c236f55%2F0f67e698-21d3-4149-a725-5120a1407b66%2Fkid2jvc_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Marshall-Miller & Company is considering the purchase of a new machine for $50,000, installed. The machine has a tax life of 5
years. Under the new tax law, the machine is eligible for 100% bonus depreciation, so it will be fully depreciated at t = 0. The firm
expects to operate the machine for 4 years and then to sell it for $23,700. The marginal tax rate is 25%. When the machine is sold
at the end of Year 4, its after-tax salvage value should be $ ___. (Round your answer to the nearest whole number.)
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