1.

You just purchased some equipment for $100,000. If the salvage value is $20,000, and you decide to depreciate it straight-line in 5 years, whats the annual depreciation? and whats the book value after 5 years? If you decide to depreciate with 5-year MACRS schedule, whats the annual depreciation, and whats the book value after 5 years? If you decide to depreciate with 7-year MACRS schedule, whats the annual depreciation for the first 5 years, and whats the book value after 5 years?

2.

At the end of year 5, you sell the equipment for $15,000. Whats the after-tax salvage value under scenarios A B and C? Assume the tax rate is 30%