Question

Marshall-Miller & Company is considering the purchase of a new machine for $60,000, installed. The machine...

  1. Marshall-Miller & Company is considering the purchase of a new machine for $60,000, installed. The machine has a tax life of 5 years, and it can be depreciated according to the depreciation rates below. The firm expects to operate the machine for 5 years and then to sell it for $18,500. 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 5?

Year 1

Year 2

Year 3

Year 4

Year 5

Year 6

MACRS %

20%

32%

19%

12%

11%

6%

Depreciation expense

7,200

Book value

48,000

3,600

$0

If we sell at the end of year 5 for $18,500 then determine if we have a gain or a loss and the appropriate tax consequence

Explain answer and how to solve step by step, financial calculations, and fill out the chart too. Thanks.

0 0
Add a comment Improve this question Transcribed image text
Answer #1

GIVEN ALL SIMPLE CALCULATIONS, EVERYTHING IS SHOWN. GO THROUGH, ANY DOUBTS, HAPPY TO HELP YOU

Add a comment
Know the answer?
Add Answer to:
Marshall-Miller & Company is considering the purchase of a new machine for $60,000, installed. The machine...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
  • Marshall-Miller & Company is considering the purchase of a new machine for $50,000, installed. The machine...

    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 depredated according to the depreciation rates below. The firm expects to operate the machine for 3 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 3? Problem 6 Marshall-Miller &...

  • QUESTION 17 Marshall-Miller & Company is considering the purchase of a new machine for $51,864, installed....

    QUESTION 17 Marshall-Miller & Company is considering the purchase of a new machine for $51,864, installed. The machine has a tax life of 5 years (MACRS), and it can be depreciated according to the depreciation rates below. The firm expects to operate the machine for 4 years and then to sell it for $17,826. If the marginal tax rate is 21%, what will the after-tax salvage value be when the machine is sold at the end of Year 4? Year...

  • Marshall-Miller & Company is considering the purchase of a new machine for $50,000, installed. The machine...

    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 $21,500. If the marginal tax rate is 25%, what will the after-tax salvage value be when the machine is...

  • ABC Company is considering the purchase of a new machine for $80,000 installed. The machine will...

    ABC Company is considering the purchase of a new machine for $80,000 installed. The machine will be depreciated by MACRS as 5 year property. The firm expects to operate the machine for 4 years and then to sell it for $11,750. If the marginal tax rate is 25.00%, what will the after–tax salvage value be when the machine is sold at the end of Year 4? Enter your answer rounded to two decimal places.  

  • Brightshine Inc is considering the purchase of a new machine for $80,000 installed. The machine will be depreciated by M...

    Brightshine Inc is considering the purchase of a new machine for $80,000 installed. The machine will be depreciated by MACRS as 5 year property. The firm expects to operate the machine for 4 years and then to sell it for $13,250. If the marginal tax rate is 25.00%, what will the after-tax salvage value be when the machine is sold at the end of Year 4? I got 13,364.80

  • ABC Company is considering the purchase of a new machine for $80,000 installed. The machine will be depreciated by MACR...

    ABC Company is considering the purchase of a new machine for $80,000 installed. The machine will be depreciated by MACRS as 5 year property. The firm expects to operate the machine for 4 years and then to sell it for $11,750. If the marginal tax rate is 25.00%, what will the after-tax salvage value be when the machine is sold at the end of Year 4? Enter your answer rounded to two decimal places. Do not enter $ or comma...

  • 40. Mertogul & Company is considering the purchase of a new machine for $50,000, installed. The...

    40. Mertogul & 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 depreciation rates below. The firm expects to operate the machine for 4 years and then to sell it for $16,000. 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? Year Depreciation Rate...

  • Mars Inc. is considering the purchase of a new machine that costs $60,000. This machine will...

    Mars Inc. is considering the purchase of a new machine that costs $60,000. This machine will reduce manufacturing costs by $5,000 annually. Mars will use the MACRS accelerated method (shown below) to depreciate the machine, and it expects to sell the machine at the end of its 5-year life for $10,000. The firm expects to be able to reduce net operating working capital by $15,000 when the machine is installed, but the net working capital will return to the original...

  • XYZ corp. is considering investing in a new machine. The new machine cost will $10,000 installed....

    XYZ corp. is considering investing in a new machine. The new machine cost will $10,000 installed. Depreciation expense will be $1000 per year for the next five years. At the end of the fifth year XYZ expects to sell the machine for $6000. XYZ will also sell its old machine today that has a book value of $3000 for $3000. The old machine has depreciation expense of $600 per year. Additionally, XYZ Corp expects that the new machine will increase...

  • XYZ corp. is considering investing in a new machine. The new machine cost will $10,000 installed....

    XYZ corp. is considering investing in a new machine. The new machine cost will $10,000 installed. Depreciation expense will be $1000 per year for the next five years. At the end of the fifth year XYZ expects to sell the machine for $6000. XYZ will also sell its old machine today that has a book value of $3000 for $3000. The old machine has depreciation expense of $600 per year. Additionally, XYZ Corp expects that the new machine will increase...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT