Zippy Corporation just purchased computing equipment for 280

Zippy Corporation just purchased computing equipment for $28,000. The equipment will be depreciated using a five-year MACRS depreciation schedule. If the equipment is sold at the end of its fourth year for $10,100, what are the after-tax proceeds from the sale, assuming the marginal tax rate is 35 percent.(Round answer to 2 decimal places, e.g. 15.25.)

After-tax proceeds

$

Solution

Value of the equipment after 4 years= 28,000/4= $7000 after-tax proceeds from the sale= [(10100-7000)x(1-.35)]=$2015