Capital Foods purchased an oven 5 years ago for $45,000. The oven is being depreciated over its estimated 7-year life using MACRS depreciation. Capital is planning to replace the oven with a more automated one that will cost $150,000 installed. If the old oven can be sold for $30,000, what is the tax liability? Assume a marginal tax rate of 40 percent.

You answered this last week, however, can you tell me how you got the numbers for the MACRS depreciation rates depreciation over the 7 year life ? You had year 1 = 14.29 Year 2 = 24.49 Year 3 = 17.49 year 4 = 12.49 and year 5 = 8.93. How did you get these numbers???