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Assuming the following for a piece of equipment: Purchase price and installation cost: $16000, 5-year useful life with an estimated salvage value of $3000. If
Assuming the following for a piece of equipment: Purchase price and installation cost: $16000, 5-year useful life with an estimated salvage value of $3000. If you sell it after 3 years at (a) $9000, (b) $5500. What is your capital gain (the sell price - book value of the equipment)?
A. $800, -$2,700 B. -$1,000, $2,500 C. $6,000, $2,500 D. $7,000, $10,500
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