Answer:
I checked the web and found a similar question with exact same choices but different tax rate(35%) which doesn't apply for this question. Therefore, there is no correct answer in the choices given. The correct solution is as follows;
Explanation:
Depreciation schedule using the MACRS rates;
<u>Year</u> <u>Depreciation</u><u> </u> <u>Accumulated depreciation </u>
Yr1 0.2*287000 = 57,400 57,400
Yr2 0.32*287,000 = 91,840 57,400 + 91,840 = 149,240
Yr3 0.192* 287,000 = 55,104 55,104 + 149,240 = 204,344
Yr4 0.1152 * 287,000 = 33,062.40 33,062.40 + 204,344 = 237,406.40
Therefore, book value today is $287,000 - $237,406.40 = $49,593.60
<em>Aftertax salvage value = Salvage - (Salvage-Book value)*tax</em>
= 105,000 - (105,000 - 49,593.60)*0.24
=105,000 - 13,297.536
= $91,702.46
Therefore, none of the choices is correct.
