Answer:
$4,833.282
Explanation:
Calculation to determine the after-tax salvage value
First step is to calculate the remaining value after 3 years
Using this formula
Remaining value after 3 years = (Purchase price)x(1-summation of MACR rates from start to the current date)
Let plug in the formula
Remaining value after 3 years=$53,000*[(1-0.3333)-0.4445-0.1481]
Remaining value after 3 years=$53,000*$0.0741
Remaining value after 3 years=$3,927.3
Now let calculate the after-tax salvage value
After-tax salvage value=$5,300-[($5,300-$3,927.3)*0.34]
After-tax salvage value=[$5,300-($1,372.7*0.34)]
After-tax salvage value=$5,300-$466.718
After-tax salvage value=$4,833.282
Therefore The After-tax salvage value will be $4,833.282
