Your Firm Needs a Machine Which Costs $125,000, and Requires

question 97

Multiple Choice

Your firm needs a machine which costs $125,000, and requires $5,000 in maintenance for each year of its 3-year life. After 3 years, this machine will be replaced. The machine falls into the MACRS 3-year class life category. Assume a tax rate of 35% and a discount rate of 10%. If this machine can be sold for $15,000 at the end of year 3, what is the after-tax salvage value?

• A) $9,262.50
• B) $9,750.00
• C) $11,692.69
• D) $12,991.88

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Definitions:

Genetic Disorders

Diseases or conditions caused by an abnormality in an individual's DNA, which can be inherited or occur due to mutations.

Carriers

Individuals who possess one copy of a gene mutation that can lead to a genetic disorder if passed on to offspring, but do not typically show symptoms of the disorder themselves.

Birth Process

Is the series of events that lead to the delivery of a baby, beginning with labor and culminating in childbirth.

Classified

A term used to describe something that has been arranged in categories or classified based on specific criteria.