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11 - MACRS and Salvage Tax Problem (C) A company has taxable income from other sources of $58,000 per year. It is considering the purchase of a front-end loader truck that costs $70,000 and The company has an incremental state income tax rate of 8%. when the truck is sold. What is this taxable gain called? has an estimated salvage value of $10,000 at the end of 5 years useful life. A) Compute the MACRS depreciation schedule and any taxable gain or loss B) If the purchasing companys taxable income remained at $58,000 from all other sources in the year that the truck was sold, how much extra would the company have to pay in corporate income taxes (Federal+State) because of the additional taxable income from the truck sale? C) The companys cost of money is 8%, and they add 4 percentage points to get a MARR of 12%. If the truck were to reduce labor costs by $15,000/year for each of its five useful years, should the company buy it?
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