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

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 $303,000.
a. What is the book value of the equipment?
b. If Jones sells the equipment today for $177,000 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.
Note: Assume that the equipment is put into use in year 1 and the new order will consume the remainder of
the machine's useful life.
a. What is the book value of the equipment?
The book value of the equipment after the third year is $.(Round to the nearest dollar.)
b. If Jones sells the equipment today for $177,000 and its tax rate is 30%, what is the after-tax cash flow from
selling it?
The total after-tax proceeds from the sale are $.(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 extra depreciation on the machine.
B. Yes, the cost of taking the order is the lost after-tax cash flow of $150,079 from selling the machine.
C. Yes, the cost of taking the order is the lost $87,264 in book value.
D. No, Jones already owns the machine, so there is no cost to using it for the order.
I NEED THIS ANSWERED ASAP!!! PLEASE!! I WILL UPVOTE
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