The Jones Company has just completed the third year of a five-year MACRS recovery period for a piece of equipment it originally purchased for

$ 297 comma 000$297,000.

a. What is the book value of the equipment?

b. If Jones sells the equipment today for

$ 178 comma 000$178,000

and its tax rate is

25 %25%,

what is the after-tax cash flow from selling it?

Note:

Assume that the equipment is put into use in year 1.