Assume tha a piece of equipment is purchased for $100,000. It costs $5000 to install the equipment. We expect it to last for 5 years, and believe that we will be able to sell it for $25,000 at the end of that five year period of time.

A. What is the depreciation base for the equipment?

B. Using straight-line depreciation, what is the annual depreciation?

c. After 3 years, how much accumulated depreciation will there be?

d. After 2 years, what is the net or book value of the equipment?

e. If we sell it after 3 years for $50,000 will we have to record a gain or a loss? How much?