BUSN 602 What is the after-tax salvage value?
Your firm needs a computerized machine tool lathe which costs $53,000 and requires $12,300 in maintenance for each year of its 3-year life. After three years, this machine will be replaced. The machine falls into the MACRS 3-year class life category. Assume a tax rate of 34 percent and a discount rate of 12 percent.
If the lathe can be sold for $5,300 at the end of year 3, what is the after-tax salvage value? (Round your answer to 2 decimal places.)