McPherson Company Must Purchase a New Milling MachineThe Purchase Price

Multiple Choice

McPherson Company must purchase a new milling machineThe purchase price is $50,000, including installationThe machine has a tax life of 5 years, and it can be depreciated according to the following rates The firm expects to operate the machine for 4 years and then to sell it for $12,500 If the marginal tax rate is 40%, what will the after-tax salvage value be when the machine is sold at the end of Year 4?

A) $ 8,878
B) $ 9,345
C) $ 9,837
D) $10,355
E) $10,900