1a. A three-year-old machine has a cost of $50,000, an estimated residual value of $5,000, and an estimated useful life of five years. The company uses straight-line depreciation.

Calculate the net book value at the end of the third year.

1b.

A three-year-old machine has a cost of $37,600, an estimated residual value of $2,600, and an estimated useful life of 35,000 machine hours. The company uses units-of-production depreciation and ran the machine 5,200 hours in year 1; 6,150 hours in year 2; and 6,800 hours in year 3.

Calculate the net book value at the end of the third year.