Marshall-Miller & Company Is Considering the Purchase of a New

Multiple Choice

Marshall-Miller & Company is considering the purchase of a new machine for $50,000,installed.The machine has a tax life of 5 years,and it can be depreciated according to the depreciation rates below.The firm expects to operate the machine for 4 years and then to sell it for $2,500.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? $$\begin{array} { c c } \text { Year } & \text { Depreciation Rate } \\\hline 1 & 0.20 \\2 & 0.32 \\3 & 0.19 \\4 & 0.12 \\5 & 0.11 \\6 & 0.06\end{array}$$
?

A) $4,508
B) $4,998
C) $5,488
D) $4,900
E) $4,655