1. Three years ago Cody bought a special oven for his small restaurant. At the time he paid $8,000 for it and the accountant told him to depreciate it straight line over five years. Now there is a new much improved oven out so Cody is going to sell his old oven. He can get $3,500 for the old oven. Cody is in the 21% tax bracket.

What is the book value of the old oven? ___________________

What is the market value of the old oven? _________________

Will there be a gain or a loss? __________________

What will be the amount of the tax effect? ____________________

What is the after tax salvage value of the old oven? ___________________