First cost of equipment = $150,000 Market value at the end of year 6 = $30,000 MACRS depreciation is used. The equipment is a 5-year property. Incremental income-tax rate for the company = 35%

Year	0	1	2	3	4	5	6
BT-CF in $	-150K	60K	63K	66K	69K	72K	75K
O&M Expenses		10K	13K	16K	19K	22K	25K

The tax on depreciation recapture in year 6 is equal to __________________.

Answers:	A. $10,500
	B. $6,000
	C. $3,000
	D. $10,000