5. You have purchased a piece of equipment for $125,000. The estimated life for the equip- ment is 5 years, and has a salvage value of $25,000. Assuming that the depreciation is via the straight line method, what is the book value of the equiment after 3 years?

Using the previous piece of equipment, compute the book value using the Modified Accelerated Cost Recovery System (MACRS) at the end of year 3.