2). Assume the equipment is classified as seven-year property under MACRS. What is the depreciation expense in Year 4 for this equipment? What is the book value at the end of Year 5 for this equipment? 4. Consider an asset t tax life. The asset is to be used in a five-year project. If the relevant income tax rate is 40 percent, and the capital gains tax rate is 15 percent, what is the after-tax cash flow from the sale of this asset? 1) At the end of the project, the asset can be sold for $95,000. 2) At the end of the project, the asset can be sold for $120,000. 3) At the end of the project, the asset can be sold for $210,000 4) At the end of the project, the asset can be sold for $760,000. and is depreciated straight-line to zero over its six-year 5. An asset used in a four-year project falls in the five-year MACRS class for tax purposes. The asset has an acquisition cost of $860,000 and will be sold at the end of the project. If the income tax rate is 35 percent, and the capital gains rate is 20 percent, what is the after-tax salvage value of the asset? 1) At the end of the project, the asset can be sold for $90,000. 2) At the end of the project, the asset can be sold for $148,608. 3) At the end of the project, the asset can be sold for $220,000. 4) At the end of the project, the asset can be sold for $ 920,000