Firm ABC is buying a new piece of machinery. The machine’s d…
Firm ABC is buying a new piece of machinery. The machine’s depreciable basis is $200,000, and it will be depreciated using the MACRS 3-year rates (33.33%, 44.45%, 14.81%, and 7.41%). The firm is interested in salvage value cash flows if it sells the machine before its usable life is done. The salvage value after 1 year is $150,000, and it will decrease by $40,000 each year thereafter. If the firm has a tax rate of 35%, what would the after-tax salvage value cash flow be if it sells the machine after 3 years of use?