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"A company bought a machine for $137,000. The machine was depriciated using a 5 year MACRS...

"A company bought a machine for $137,000. The machine was depriciated using a 5 year MACRS approach. After 4 years, the machine was sold at a salvage value of $83,900. Assuming a tax rate of 26%, 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      137,000
Depreciation      113,326
WDV        23,674
Sale price        83,900
Profit/(Loss)        60,226
Tax        15,659
Sale price after tax 83900-15659        68,241
Depreciation Year-1 Year-2 Year-3 Year-4 Total
Cost            137,000      137,000 137,000 137,000
Dep Rate 20.00% 32.00% 19.20% 11.52%
Deprecaition              27,400        43,840      26,304      15,782 113,326
   
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