Your firm needs a machine which costs $125,000, and requires$5,000 in maintenance for each year of its three-year life. Afterthree years, this machine will be replaced. The machine falls intothe MACRS three-year class life category. Assume a tax rate of 35percent and a discount rate of 10 percent. If this machine can besold for $15,000 at the end of year 3, what is the after-taxsalvage value?
$11,692.69
$9,750.00
$12,991.88
$9,262.50
