A machine initially costing $25,000 will have a salvage value of $6000 after five years. Using MACRS depreciation, what will its book value be after the third year?

** This is a horribly worded problem, but was on the FE. You must realize that the S has to be zero and then since it gives you a salvage at year 5, you should use the life as 5 or a five year class life.

$5470

$7200

$10,000

$13,600