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3) (10 points) An oil drilling company uses MACRS GDS depreciation. They purchase equipment for $80,000. They pay $2000 for shipping/handling/insurance and $4000 for

3) (10 points) An oil drilling company uses MACRS GDS depreciation. They purchase equipment for $80,000. They pay $2000 for shipping/handling/insurance and $4000 for installation and training. They will keep and use the equipment for 10 years. The computer will increase revenue by $10,000 per year. What is the book value after year 2?

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