Your Firm Needs a Machine Which Costs $60,000, and Requires

question 5

Multiple Choice

Your firm needs a machine which costs $60,000, and requires $15,000 in maintenance for each year of its five-year life. After five years, this machine will be replaced. The machine falls into the MACRS five-year class life category. Assume a tax rate of 35 percent and a discount rate of 10 percent. If this machine can be sold for $8,000 at the end of year 5, what is the after-tax salvage value?

• A)$3,456.00
• B)$4,544.00
• C)$5,200.00
• D)$6,409.60

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Definitions:

Supply Curve

The supply curve is a graphical representation showing the relationship between the price of a good and the quantity of the good that producers are willing and able to supply at various prices.

Commodity Increases

Refers to a rise in the quantity supplied or demanded of a good or service, often due to factors like price changes, improvements in technology, or shifts in consumer preferences.

Quantity Supplied

The amount of a good or service that producers are willing and able to sell at a given price over a specified period.

Supply Curve

A graphical representation of the relationship between the price of a good and the quantity supplied.