As part of the initial outlays to get the ABC Company up & running, they needed to purchase $925,000 in equipment. It also cost $12,356 for delivery of the equipment and $62,644 in installation costs.

1. Develop a depreciation table for the asset(s) utilizing the 7-year MACRS schedule found in Table A-1 of IRS Pub 946:

2. What is the Book Value of the asset(s) at the end of year 5 ?

3. If ABC Company decides to sell the assets for Book Value at the end of year five (5), how much taxes would ABC Company have to pay as a result of this transaction?

Assumptions:

• ABC Company breaks-even that year (realizing a profit of $0) before the sale (so the tax paid by ABC will be a result of this sale only)
• Capital Gains Tax Rate is 15%
• Ordinary Tax Rate is 30%

**I've created the Depreciation table and know the BV at the end of year 5 (table below). However, I don't know how to calculate C. Thank you!

Year	1	2	3	4	5	6	7	8
Depreciation Rates	14.290%	24.490%	17.490%	12.490%	8.930%	8.920%	8.930%	4.460%
Depreciation	$142,900.00	$244,900.00	$174,900.00	$124,900.00	$89,300.00	$89,200.00	$89,300.00	$44,600.00
Cumulative Depreciation	$142,900.00	$387,800.00	$562,700.00	$687,600.00	$776,900.00	$866,100.00	$955,400.00	$1,000,000.00
Book Value	$857,100.00	$612,200.00	$437,300.00	$312,400.00	$223,100.00	$133,900.00	$44,600.00	$0.00