Your Firm Needs a Computerized Machine Tool Lathe Which Costs

question 8

Multiple Choice

Your firm needs a computerized machine tool lathe which costs $50,000, requires $10,000 in installation, $5,000 in freight charges and another $12,000 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 30% and a discount rate of 12%. If the lathe can be sold for $7,000 at the end of year 3, what is the after-tax salvage value?

• A) $6,499.35
• B) $6,344.95
• C) $5,999.45
• D) $6,554.95

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Definitions:

Sebaceous Gland

A type of gland in the skin that secretes an oily substance called sebum into hair follicles to lubricate the skin and hair.

Eccrine Sweat Gland

A type of sweat gland that helps regulate body temperature through the secretion of sweat on the skin's surface.

Hair Follicle

A dynamic organ found in mammalian skin, which serves as the root of the hair shaft and is responsible for hair growth.

Integumentary System

The body system comprised of skin, hair, nails, and exocrine glands, functioning in protection, temperature regulation, and sensation.