Homework Answers
Cost of lathe= 47000
Less: Depreciation for 3 years = (33.33%+44.45%+14.81%)*47000 = 43517.30
Book value at the end of year 3 = 3482.70
Selling price= 4700
Gain = 4700-3482.70 = 1217.30
Tax on gain = 1217.3*34%= 413.88
After tax salvage = Selling price-Tax = 4700-413.88
= 4286.12
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