Your Firm Needs a Machine Which Costs $500,000, and Requires

question 30

Multiple Choice

Your firm needs a machine which costs $500,000, and requires $15,000 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 10 percent. If this machine can be sold for $50,000 at the end of year 3, what is the after-tax salvage value?

• A) $12,250.00
• B) $39,769.50
• C) $32,500.00
• D) $47,280.50

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Definitions:

Job Enrichment

Strategies to improve job satisfaction by adding more meaningful tasks, granting more control, and offering feedback to increase an employee's responsibility and growth.

Scanlon Plan

A type of employee incentive plan that focuses on sharing the cost savings or productivity gains with the workers.

Psychological Ownership

The feeling of possessorship and of being psychologically tied to an object, job, or workplace, which can influence attitudes and behaviors.

Legal Ownership

The official right to possess or use property based on a legal framework which recognizes one's claim to the asset.