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"A company bought a machine for $124,000. The machine was depriciated using a 5 year MACRS...

"A company bought a machine for $124,000. The machine was depriciated using a 5 year MACRS approach. After 4 years, the machine was sold at a salvage value of $75,500. Assuming a tax rate of 34%, what are the net proceeds from the sale of the machine?
(Hint: You will want to take your salvage values and add/subtract gains due to the sale.)"

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Answer #1
Cost of macine     124,000
Depreciation     102,573
WDV       21,427
Sale price       75,500
Profit/(Loss)       54,073
Tax @ 34%       18,385
Sale price after tax       57,115
Depreciation Year-1 Year-2 Year-3 Year-4 Total
Cost 124,000     124,000 124,000 124,000
Dep Rate 20.00% 32.00% 19.20% 11.52%
Deprecaition     24,800       39,680     23,808      14,285 102,573
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