Answer:
$1,449,068.8
Explanation:
Given the information from the question and using MACRS (Modified Accelerated Cost Recovery System) table of the United States we have
Original Investment = $5,100,000
Useful Life = 4 years
Depreciation Year 1 = 20.00% * $5,100,000
Depreciation Year 1 = $1,020,000
Depreciation Year 2 = 32.00% * $5,100,000
Depreciation Year 2 = $1,632,000
Depreciation Year 3 = 19.20% * $5,100,000
Depreciation Year 3 = $979,200
Depreciation Year 4 = 11.52% * $5,100,000
Depreciation Year 4 = $587,520
Book Value at the end of Year 4 = $5,100,000 - $1,020,000 - $1,632,000 - $979,200 - $587,520
Book Value at the end of Year 4 = $881,280
After-tax Salvage Value = Salvage Value - (Salvage Value - Book Value) * tax rate
After-tax Salvage Value = $1,600,000 - ($1,600,000 - $881,280) * 0.21
After-tax Salvage Value = $1,600,000 - $150,931.20
After-tax Salvage Value = $1,449,068.8
Hence, the after-tax salvage value is $1,449,068.8
