Required information
Use the following information to answer the next three questions:
You are evaluating a project for The Dogs, that involves the purchase of a new dog biscuit making machine. The project
has a three year life and you estimate the project will increase revenues by $196,000 and will increase costs by $36,000
each year. The project requires an initial investment of $120,000 which is depreciated on a straight-line basis to zero over
the 3 year project life. The machine will be sold at the end of the project for $35,000. The initial net working capital
investment required for this project is $22,000 which will be recovered at the end of the project's life. The tax rate is 25%
and the required return on the project is 10%,
What is the after-tax salvage value of the machine that will be purchased for this project?