Your Firm Needs a Computerized Machine Tool Lathe That Costs

question 50

Multiple Choice

Your firm needs a computerized machine tool lathe that costs $50,000 and another $12,000 in maintenance for each year of its three-year life. After three years, this machine will be replaced. The machine falls into the MACRS three-year class life category. Assume a tax rate of 21 percent and a discount rate of 12 percent. If the lathe can be sold for $6,000 at the end of year 3, what is the after-tax salvage value?

• A) $3,705.00
• B) $4,344.50
• C) $5,499.50
• D) $5,518.05

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Definitions:

Watson

Refers to James Watson, who, along with Francis Crick, Maurice Wilkins, and Rosalind Franklin, is credited with discovering the double helix structure of DNA.

Crick

Francis Crick, a British molecular biologist, biophysicist, and neuroscientist, known for co-discovering the structure of DNA along with James D. Watson.

Griffith's Transformation

A process discovered by Frederick Griffith in 1928, demonstrating that a substance from dead bacteria could genetically transform living bacteria.

Avery

Refers to Oswald Avery, a bacteriologist who was instrumental in demonstrating that DNA is the substance that causes genetic transformation.