A company purchased a new forging machine to manufacture disks for airplane turbine engines. The new press cost $3,500,000, and it falls into a seven-year MACRS property class. The company has to pay property taxes to the local township for ownership of this forging machine at a rate of 1.2% on the beginning book value of each year.
(a) Determine the book value of the asset at the beginning of each tax year.
(b) Determine the amount of property taxes over the machine's depreciable life.