Your company just bought a new piece of automotive manufacturing equipment (asset class 37.11), which will be depreciated under MACRS (GDS) with a recovery period of 7 years. Given a cost basis of $159,000, please answer the following questions:

a) How much does the asset depreciate in Year 2?

b) What is the cumulative depreciation up to and including Year 4?

c) What is the book value at the end of Year 5?

d) If the asset is sold in Year 6, what is the allowable depreciation in that year?

Year 3-yeara 20-yearb 0.3333 0.4445 0.1481 0.0741 Depreciation Rate for Recovery Period 5-yeara 7-yeara 10-yeara 15-yearb 0.2000 0.1429 0.1000 0.0500 0.3200 0.2449 0.1800 0.0950 0.1920 0.1749 0.1440 0.0855 0.1152 0.1249 0.1152 0.0770 0.1152 0.0893 0.0922 0.0693 0.0375 0.0722 0.0668 0.0618 0.0571 0.0576 0.0892 0.0893 0.0446 0.0737 0.0655 0.0655 0.0656 0.0655 0.0623 0.0590 0.0590 0.0591 0.0590 0.0528 0.0489 0.0452 0.0447 0.0447 0.0328 0.0591 0.0590 0.0591 0.0590 0.0591 0.0446 0.0446 0.0446 0.0446 0.0446 0.0295 0.0446 0.0446 0.0446 0.0446 0.0446 0.0223