Problem 17.027: Determine differences in taxes paid using SL and MACRS depreciation methods Equipment associated with manufacturing small railcars had a first cost of $160,000 with an expected salvage value of $30,000 at the end of its 5- year life. The revenue was $644,000 in year 2, with operating expenses of $98,000. If the company's effective tax rate was 30%, what would be the difference in taxes paid in year 2 if the depreciation method were straight line instead of Modified Accelerated Cost Recovery System (MACRS)? The MACRS depreciation rate for year 2 is 32%. The difference in taxes paid is determined to be $