Engineering Economy 7th Edition by Leland Blank ,Anthony Tarquin

Exercise 34

An asset purchased by Stratasys, Inc. had a first cost of $70,000 with an expected salvage value of $10,000 at the end of its 5-year life. In year 2, the revenue was $490,000 with operating expenses of $140,000. If the company's effective tax rate was 36%, determine the difference in taxes paid in year 2 if the depreciation method had been straight line instead of MACRS.