The Jones Company has just completed the third year of a5-year diminishing value recovery period for a piece of equipment it originally purchased for $304000. The depreciation rate is 40%.

a. What is the book value of theequipment?

b. If Jones sells the equipment today for $78000 and its tax rate is 30%, what is theafter-tax cash flow from sellingit?

c. Just before it is about to sell theequipment, 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 ifso, what isit? Explain.(Assume the new order will consume the remainder of themachine's usefullife.)

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

b. If Jones Company sells the equipment today for $78000 and its tax rate is 30%, the totalafter-tax proceeds from the sale will be $ .................. (Round to the nearestdollar.)

c. Just before it is about to sell theequipment, 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 ifso, what isit? Explain. (Select the best choicebelow.)

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

B. Yes, the cost of taking the order is the lost $65664 in book value.

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

D. Yes, the cost of taking the order is the lostafter-tax cash flow of $74299 from selling the machine.