Answer:
The aftertax salvage value of the machine is D) $10,134
Explanation:
Hi. first, we need to find out the book value of the machine at the selling date, that is 3 years from now, and the book value is as follows.
![BookValue=90,000-90,000*0.3333-90,000*0.4444-90,000*0.1482=6,669](https://tex.z-dn.net/?f=BookValue%3D90%2C000-90%2C000%2A0.3333-90%2C000%2A0.4444-90%2C000%2A0.1482%3D6%2C669)
Since taxes are based on the profit you make by selling something, our profit is:
![Profit=12,000-6,669=5,331](https://tex.z-dn.net/?f=Profit%3D12%2C000-6%2C669%3D5%2C331)
Therefore, our taxes are:
![Taxes=5,331*0.35=1,866](https://tex.z-dn.net/?f=Taxes%3D5%2C331%2A0.35%3D1%2C866)
So, the after tax salvage value of the machine is the money you received on the sale minus the taxes you have to pay, that is:
Salvage Value of the Machine = $12,000 - $1,866?= $10,134
That is option D)
Best of luck.