Answer:
$131,667.47
Explanation:
Year 1 depreciation allowance = $697,400 * 0.2 = $139,480
Year 2 depreciation allowance = $697,400 * 0.32 = $223,168
Year 3 depreciation allowance = $697,400 * 0.192 = $133,900.80
Year 4 depreciation allowance = $697,400 * 0.1152 = $80,340.48
Book value in year 4= $697,400 - $139,480 - $22,168 - $133,900.80 - $80,340.48 = $120,510.72
Tax on gain on disposal = ($135,000 - $120,510.72) * 23% = $3,332.53
Aftertax salvage value = $135,000 - $3,332.53 = $131,667.47