Book value and taxes on sale of assetsTroy Industries purchased a new machine year(s) ago for $84,000. It is being depreciated under MACRS with a 5-year recovery period using the schedule below

Rounded Depreciation Percentages by Recovery Year Using MACRS for First Four Property Classes Percentage by recovery year* Recovery year 3 years 5 years 7 years 10 years 1 33% 20% 14% 10% 2 45% 32% 25% 18% 3 15% 19% 18% 14% 4 7% 12% 12% 12% 5 12% 9% 9% 6 5% 9% 8% 7 9% 7% 8 4% 6% 9 6% 10 6% 11 4% Totals 100% 100% 100% 100%

Assume 40% ordinary and capital gains tax rates

Assume ordinary and capital gains tax rates.

a. What is the book value of the machine?

b. Calculate the firm's tax liability if it sold the machine for each of the following amounts: $100,800; $58,800; and $10,000.