Your Firm Needs a Computerized Machine Tool Lathe That Costs

question 110

Multiple Choice

Your firm needs a computerized machine tool lathe that costs $50,000, requires $10,000 in installation, $5,000 in freight charges, and another $12,000 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 30 percent and a discount rate of 12 percent. 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:

John Holland

An American psychologist best known for his career development theory that matches job environments with individual personalities and preferences.

Stratification System

A stratification system is the hierarchical arrangement of individuals in a society, often based on factors such as wealth, power, race, or social status.

Credentialism

The practice of valuing credentials for jobs or social status more than actual skills or abilities.

Professionalization

Refers to the process of establishing a set of standards, ethics, and qualifications for a specific occupation, turning it into a recognized profession.