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Ronnie's Custom Cars purchased some fixed assets two years ago for $39,000. The assets are classified as 5-year property for MACRS. Ronnie is considering selling these assets now so he can buy some newer fixed assets which utilize the latest in technology. Ronnie has been offered $19,000 for his old assets. What is the after-tax salvage value if the tax rate is 34%

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Based on the MACRS classification and the amount Ronnie is offered, the after-tax salvage value is $18,904.80.

What is the after-tax salvage value?

First find the book value at the date of sale:

= Cost x (1 - MACRS year 1 - MACRA year 2)

= 39,000 x (1 - 20% - 30%)

= $18,720

Then find the gain on sale:

= 19,000 - 18,720

= $280

The after tax salvage value is:

= Amount offered - (Gain x Tax rate)

= 19,000 - (280 x 34%)

= $18,904.80

Find out more on salvage value at https://brainly.com/question/14117783.

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