The Target Copy Company Is Contemplating the Replacement of Its

Multiple Choice

The Target Copy Company is contemplating the replacement of its old printing machine with a new model costing $60,000. The old machine, which originally cost $40,000, has 6 years of expected life remaining and a current book value of $30,000 versus a current market value of $24,000. Target's corporate tax rate is 40 percent. If Target sells the old machine at market value, what is the initial after-tax outlay for the new printing machine?

A) -$22,180
B) -$30,000
C) -$33,600
D) -$36,000
E) -$40,000