2. a. An asset with the cost basis of 121,000 and a 5 year life using the MACRS method. What is the depreciation amount in year 3 of the assets life? b. For the asset in the problem above, what is the asset's book value after the second year's depreciation has been applied? TABLE 1 MACRS Half-Year Convention Depreciation Rate for Recovery Period Year 3-Year 5-Year 7-Year 10-Year 15-Year 20-Year 5.00% 1 2. 3 9.50 33.33% 44.45 14.81 7.41 20.00% 32.00 19.20 11.52 11.52 5.76 4 14.29% 24.49 17.49 12.49 8.93 8.92 8.93 4.46 5 6 7 10.00% 18.00 14.40 11.52 9.22 7.37 6.55 6.55 6.56 6.55 3.28 8 9 10 11 12 13 8.55 7.70 6.93 6.23 5.90 5.90 5.91 5.90 5.91 5.90 5.91 5.90 5.91 2.95 3.750% 7.219 6.677 6.177 5.713 5.285 4.888 4.522 4.462 4.461 4.462 4.461 4.462 4.461 4.462 4.461 4.462 4.461 4.462 4.461 2.231 14 15 16 17 18 19 20 21