Posted: September 10th, 2016
Blue Jay Industries is considering the purchase of a new machine. It will replace an existing but obsolete machine that will be sold for $40,000. The existing machine is 8 years old, cost $150,000, had a 10 year useful life, and is being depreciated to zero using the straight line method. Blue Jay s income tax rate is 40 %. What is the after tax salvage value of the old machine?
Blue Jay Industries is considering the purchase of a new machine. It will replace an existing but obsolete machine that will be sold for $40,000. The existing machine is 8 years old, cost $150,000, had a 10 year useful life, and is being depreciated to zero using the straight line method. Blue Jay s income tax rate is 40 %. What is the after tax salvage value of the old machine?
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