Question 3 An equipment is bought at $80,000 and the depreciation period is assumed to be 4 years. The salvage value is estimated to be $20,000. What is the depreciation expense each year using the sum of the year's digits approach? Show your calculations for full credit. Depreciation Year 0 (when equipment is 0 purchased) Year 1 Year 2 Year 3 Year 4 Book value Question 4 A farm business has financed its assets with 70% debt. It has ROE of 5% and COFD of 2% what would be ROA? (Hint: Use the expression of ROA in terms of ROE and COFD I showed in class). Is ROA larger or smaller than ROE? Would you have expected this? Why or why not?