The new computer system of Calculus Ltd cost $125 000. Calculus will outgrow it in three years. When Calculus sells it, it will probably only get 20 per cent of the purchase price. The computer will be depreciated at 25 per cent prime cost. Assume a 30 per cent tax rate.

Required:

a) Calculate the depreciation and book values for the three years.

b) What will be the after-tax proceeds from the sale?