Marshall-Miller & Company is considering the purchase of a new machine for $50,000, installed. The machine has a tax life of 5 years, and it can be depreciated according to the following rates. The firm expects to operate the machine for 4 years and then to sell it for $12,500. If the marginal tax rate is 40%, what will the after-tax salvage value be when the machine is sold at the end of Year 4?
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Depreciation
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Year
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Rate
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1
|
0.20
|
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2
|
0.32
|
|
3
|
0.19
|
|
4
|
0.12
|
|
5
|
0.11
|
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6
|
0.06
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