Leisure Vacations Is Considering a Project with a Life of 5

Multiple Choice

Leisure Vacations is considering a project with a life of 5 years that will require the purchase of $1.4 million in new 5-year MACRS equipment.The MACRS rates are 20 percent,32 percent,19.2 percent,11.52 percent,11.52 percent,and 5.76 percent for Years 1 to 6,respectively.Ignore bonus depreciation.The firm desires a minimum 14 percent rate of return and the tax rate is 22 percent.The equipment can be sold at the end of the project for an estimated $225,000.What is the amount of the aftertax salvage value?

A) $187,600.00
B) $162,418.54
C) $195,322.15
D) $184,238.97
E) $193,240.80