Anthony, Ltd

question 69

Multiple Choice

Anthony, Ltd. purchases a machine for $15,000. This machine qualifies as a five-year recovery asset under MACRS with the fixed depreciation percentages as follows: year 1 = 20.00%; year 2 = 32.00%; year 3 = 19.20%; year 4 = 11.52%. Anthony has a tax rate of 33%. If the machine is sold at the end of four years for $4,000, what is the cash flow from disposal?

• A) $3,535.36
• B) $3,408.22
• C) $2,592.00
• D) $1,408.00

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Definitions:

Opportunity Cost

Choosing one path results in the loss of potential benefits that could have been gained from other paths.

German Car

Refers to automobiles manufactured in Germany, known for their engineering, performance, and quality.

Specialization

The process of focusing resources on the production of specific goods or services to increase efficiency and output.

Household Production

The creation of goods and services by individuals or families for their personal use, as opposed to goods and services produced for sale or exchange.