Reference no: EM132657151

Rounded Depreciation Percentages by Recovery Year Using MACRS for First Four Property Classes Troy Industries purchased a new machine 3 ?year(s) ago for $82,000. It is being depreciated under MACRS with a? 5-year recovery period using the schedule. Assume 40% ordinary and capital gains tax rates.

MACRS SCHEDULE:

Percentage by recovery year

Recovery year            3 years          5 years            7 years           10 years

1                             33%                20%          14%               10%

2                            45%               32%           25%                 18%

3                           15%                19%          18%                  14%

4                           7%                 12%           12%                  12%

5                           12%                9%           9%

6                            5%                 9%          8%

7                            9%                 7%

8                            4%                  6%

9                              6%

10                            6%

11                            4%

Totals                     100%              100%          100%                100%

Question a. What is the book value of the? machine?

Question b. Calculate the? firm's tax liability if it sold the machine for each of the following? amounts: $98,400?; $57,400?; $23,780?; and $16,600.