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McPherson Company must purchase a new milling machine. The purchase price is $50,000, including installation....

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McPherson Company must purchase a new milling machine. The purchase price is $50,000, including installation. The machine has a tax life of 5 years, and it can be depreciated according to the following rates. The firm expects to operate the machine for 4 years and then to sell it for $12,500. If the marginal tax rate is 25%, what will the after-tax salvage value be when the machine is sold at the end of Year 4? Depreciation Rate Year 1 0.20 2 0.32 3 0.19 4 0.12 5 0.11 6 0.06 a. $9,367 O b. $11,500 O c. $9,860 O d. $10,379 O e. $10,925

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