3. 12.8 Pneumatics Engineering purchased a machine that had a first cost of $40,000, an expected useful life of 8 years, a recovery period of 10 years, and a salvage value of $10,000. The operating cost of the machine is expected to be $15,000 per year. If the inflation rate is 6% per year and the MARR is 11% per year, determine the straight line

(a) depreciation amount for year 3, and

(b) book value for year 3.