Question

AP Company purchased a Machine at cost of $150,000 on Jan 1, 2015. This machine falls under MACRS 5-Year property. AP pays tax at 38%. This machine was sold on Dec 31, 2018 at $32,000. What is the after-tax salvage value?

Relevant Depreciation Table

Year

1

2

3

4

5

6

Dep Rate

20.00%

32.00%

19.20%

11.52%

11.52%

5.76%

a) $29,689.60

b)

$25,920.00

c) $19,840.00

$23,123.20​

Answer 1

Answer:

i think that the answer is c. 19,840.00