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

$305,000.

a. What is the book value of the equipment?

b. If Jones sells the equipment today for

$175,000

and its tax rate is

35%,

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

Note:

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