Bell’s Amusements purchased an expensive ride for their theme and amusement park situated within a city-owned expo center. Bell’s had a multiyear contract with the expo center. The ride cost \($1.2\) million. Bells anticipated that the ride would have a useful life of 12 years, after which the net salvage value would be \($0.\) After 4 years, the city and Bell’s were unable to come to an agreement regarding an extended contract. In order to expedite Bell’s departure, the expo center agreed to purchase the ride and leave it in place. Right at the end of the fourth fiscal year, the expo center paid Bell’s the unrecovered investment (remember the half-year convention for MACRS-GDS).

Determine the amount paid, assuming

a. straight-line depreciation used for valuation purposes was agreed upon.

b. MACRS-GDS depreciation used for tax purposes (state the property class) was agreed upon.