1. Farris Industrial purchased a machine five years ago at a cost of $164,900. The machine is being depreciated using the straight-line method over eight years. The tax rate is 21 percent and the discount rate is 14 percent. If the machine is sold today for $42,500, what will the aftertax salvage value be?
A. $31,794.72
B. $49,268.13
C. $38,439.13
D. $46,560.88
2.Kustom Cars purchased a fixed asset two years ago for $39,000 and sold it today for $19,000. The assets are classified as 5-year property for MACRS. The MACRS table values are 0.2000, 0.3200, 0.1920, 0.1152, 0.1152, and 0.0576 for Years 1 to 6, respectively. What is the net cash flow from the salvage value if the tax rate is 21 percent?
$18,941
$18,020
$18,902
$19,000