A Machine Is Purchased for $500,000 and Is Used Through

question 96

Multiple Choice

A machine is purchased for $500,000 and is used through the end of Year 2.The machine will be depreciated using the 3-Year MACRS schedule.At the end of Year 2,the machine is sold for $75,000.What is the after-tax cash flow from the sale of the machine at the end of Year 2 if the firm's marginal tax rate is 40%?

• A)$37,050
• B)$15,180
• C)$37,950
• D)$59,820