Maritech Purchased a Pellet Mill 4 Years Ago for $60,000

question 45

Multiple Choice

Maritech purchased a pellet mill 4 years ago for $60,000. The mill is being depreciated over 7 years using MACRS. Maritech is planning to replace the mill with a higher volume unit that will cost $110,000 installed. If the old mill can be sold for $25,000, what is the tax liability? Assume a marginal tax rate of 40%. Use the rounded MACRS schedule listed below.
(7-Year Depreciation Schedule: 14%, 25%, 18%, 12%, 9%, 9%, 9%, 4%)

• A) $3,754
• B) $7,498
• C) $2,560
• D) $16,502

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Definitions:

Arterial Blood Gas

A test that measures the oxygen and carbon dioxide levels in arterial blood, assessing lung function.

Chronic Obstructive Pulmonary Disease

It's a group of lung conditions, including emphysema and chronic bronchitis, that cause breathing difficulties due to airflow obstruction.

Oxygen Therapy

The administration of oxygen as a medical intervention, which can be for a variety of purposes in both chronic and acute patient care.

Carbon Dioxide Retention

A condition where the body retains excess carbon dioxide due to inadequate respiratory function.