56. An asset is purchased for $90,000 with the intention of keeping it for 10 years, but is sold at the end of year 3. A total of $30,000 was borrowed money that was to be repaid over three years in equal annual payments, including principal and interest. The depreciation is correct for the appropriate MACRS Recovery Period.

a. What is the property class of the asset?

b. What is the value of MARR?

c. What is the salvage value received at the end of year 3?

d. What is the loan interest rate?

e. Determine the value of the entries in the BOLD BORDERED cells.

Transcribed Image Text:

BTLCF + RCVD LOAN + RCVD LOAN INT + RCVD LOAN PRINC EOY - PAID - PAID - PAID + RCVD - PAID TAX + RCVD ATCF + RCVD DEPR 0 -$90,000.00 $30,000.00 BK VALUE $90,000.00 - PAID - PAID PWATCF -$60,000.00-$60,000.00 1 $35,000.00 2 $35,000.00 -$4,500.00 $8,639.31 -$3,204.10 $12,861.00 $77,139.00 $17,639.00-$7,408.38 $14,452.31 $12,903.85 $9,754.90 -$4,097.06 $17,763.63 $14,161.06 3 $40,000.00 $7,870.50 $47,227.50