The old equipment and modification costs would be depreciated

straight$-$line over five years. Producing storage devices would also require the purchase of new

equipment costing $$850,000.$ For purposes of depreciation, the new equipment would be in the $7-$year

MACRS class. This equipment would only have a useful life of six years, at the end of which it would

have a scrap value of $10\%$ of the purchase price.