14. Hercules Exercise Equipment Co. purchased a computerized measuring device two years ago for $80,000. The equipment falls into the five-year category for MACRS depreciation and can currently be sold for $35,800. A new piece of equipment will cost $240,000. It also falls into the five-year category for MACRS depreciation. Assume the new equipment would provide the following stream of added cost savings for the next six years. Use Table 1212. Use Appendix B for an approximate answer but calculate your final answer using the formula and financial calculator methods. Table 12-12 Depreciation percentages (expressed in decimals) Depreciation 3-Year 5-Year 7-Year 10-Year 15-Year 20-Year Year MACRS MACRS MACRS MACRS MACRS MACRS 0.333 0.200 0.143 0.100 0.050 0.038 0.445 0.320 0.245 0.180 0.095 0.072 0.148 0.192 0.175 0.144 0.086 0.067 4 0.074 0.115 0.125 0.115 0.077 0.062 5 0.115 0.089 0.092 0.069 0.057 0.058 0.089 0.074 0.062 0.053 7 0.089 0.066 0.059 0.045 8 0.045 0.066 0.059 0.045 9 0.065 0.059 0.045 10 0.065 0.059 0.045 11 0.033 0.059 0.045 12 0.059 0.045 13 0.059 0.045 14 0.059 0.045 15 0.059 0.045 16 0.030 0.045 17 0.045 18 0.045 19 0.045 20 0.045 21 0.017 1.000 1.000 1.000 1.000 1.000 1.000 Year Cash Savings 1 $ 62,000 2 52,000 3 50,000 4 48,000 5 45,000 6 34,000 The firm's tax rate is 25 percent and the cost of capital is 9 percent. a. What is the book value of the old equipment? (Do not round intermediate calculations and round your answer to the nearest whole dollar.) Book value b. What is the tax loss on the sale of the old equipment? (Do not round intermediate calculations and round your answer to the nearest whole dollar.) Tax loss c. What is the tax benefit from the sale? (Do not round intermediate calculations and round your answer to the nearest whole dollar.) Tax benefit