1) A piece of capital equipment costing $410,000 today has no salvage value at the end of five years. If straight-line depreciation is used, what is the book value of the equipment at the end of three years? A) $246,000 B) $123,000 C) $82,000 D) $164,000 2) A firm has a general-purpose machine, which has a book value of $303,000 and is worth $506,000 in the market. If the tax rate is 21 percent, what is the opportunity cost of using the machine in a project? A) $203,000 B) $303,000 C) $463,370 D) $506,000 3) A project requires an initial investment of $170,000 and expects to produce a cash flow before taxes of $130,000 per year for two years (i.e., cash flows will occur at t=1 and 1=2). The corporate tax rate is 21 percent. The assets will depreciate using the MACRS 3-year schedule: (t=1, 33%); (1 = 2: 45%); (t=3: 15%); (t=4: 7%). The company's tax situation is such that it can use all applicable tax shields. The opportunity cost of capital is 12 percent. Assume that the asset can sell for book value at the end of the project. Calculate the NPV of the project (approximately). A) $53,289 B) $56,437 C) $56,709 D) $39,695