Compute asset current book value and tax payment

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Reference no: EM131085715

Equipment purchased for $100,000 five years ago was depreciated using SL over 10 years. (Assume no salvage value.) Assume the purchaser is profitable with an ordinary income tax rate of 33% and a longterm capital gains tax rate of 15%. Compute the asset's current book value, then compute the tax payment (show as negative number) or tax savings (show as positive number) if the equipment is sold now for each of the following amounts:

$10,000 (b) $50,000 (c) $70,000 (d) $120,000.

Reference no: EM131085715

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