The Jones Company has just completed the third year of a 5-year diminishing value recovery period for a piece of equipment it originally purchased for $303 000. The depreciation rate is 40%. a. What is the book value of the equipment? b. If Jones sells the equipment today for $72 000 and its tax rate is 30%, what is the after-tax cash flow from selling it? c. Just before it is about to sell the equipment, Jones receives a new order. It can take the new order if it keeps the old equipment. Is there a cost to taking the order and if so, what is it? Explain. (Assume the new order will consume the remainder of the machine's useful life.)

a. The book value of the equipment after the third year is $. (Round to the nearest dollar.)

b. If Jones Company sells the equipment today for $72 000 and its tax rate is 30%, the total after-tax proceeds from the sale will be $. (Round to the nearest dollar.)

c. Just before it is about to sell the equipment, Jones receives a new order.

It can take the new order if it keeps the old equipment. Is there a cost to taking the order and if so, what is it? Explain. (Select the best choice below.)

A. Yes, the cost of taking the order is the lost $65 448 in book value.

B. No, Jones already owns the machine, so there is no cost to using it for the order.

C. Yes, the cost of taking the order is the lost after-tax cash flow of $70 034 from selling the machine.

D. Yes, the cost of taking the order is the extra depreciation on the machine.