What is the after tax salvage value

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Reference no: EM13948809

Your firm needs a machine which costs $120,000, and requires $27,000 in maintenance for each year of its 7 year life. After 3 years, this machine will be replaced. The machine falls into the MACRS 7 year class life category. Assume a tax rate of 40% and a discount rate of 16%. If this machine can be sold for $12,000 at the end of year 7, what is the after tax salvage value?

Reference no: EM13948809

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