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 $ $304$ comma $000.$ The depreciation rate is $40\%.$

a$.$ What is the book value of the$$ equipment?

b$.$ If Jones sells the equipment today for $ $76$ comma $000$ 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.$)$

Question content area bottom

Part $1$

a$.$ The book value of the equipment after the third year is $$$

$$

enter your response here. $($Round to the nearest$$ dollar.$)$

Part $2$

b$.$ If Jones Company sells the equipment today for $ $76$ comma $000$ and its tax rate is $30\%,$ the total$$ after$-$tax proceeds from the sale will be $$$

$$

enter your response here. $($Round to the nearest$$ dollar.$)$

Part $3$

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$.$

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

B$.$

$$Yes$,$ the cost of taking the order is the lost$$ after$-$tax cash flow of $ $72$ comma $899$ from selling the machine.

C$.$

$$Yes$,$ the cost of taking the order is the lost $ $65$ comma $664$ in book value.

D$.$

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