Ronnie's Custom Cars Purchased Some Fixed Assets Two Years Ago

question 76

Multiple Choice

Ronnie's Custom Cars purchased some fixed assets two years ago for $39,000.The assets are classified as 5-year property for MACRS.Ronnie is considering selling these assets now so he can buy some newer fixed assets which utilize the latest in technology.Ronnie has been offered $19,000 for his old assets.What is the net cash flow from the salvage value if the tax rate is 34%?
$$\begin{array}{l}\text { MACRS 5-year property }\\\begin{array} { c c } \underline{\text { Year }} & \underline{\text { Rate} } \\ 1 & 20.00 \% \\2 & 32.00 \% \\3 & 19.20 \% \\4 & 11.52 \% \\5 & 11.52 \% \\6 & 5.76 \%\end{array}\end{array}$$

• A)$16,358.88
• B)$17,909.09
• C)$18,720.00
• D)$18,904.80
• E)$19,000.00

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