What is the book value of the machine

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Reference no: EM131339850

Troy Industries purchased a new machine 5 year(s) ago for $84,000.

It is being depreciated under MACRS with a 5-year recovery period using the schedule

Rounded Depreciation Percentages by Recovery Year Using MACRS for

First Four Property Classes

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%

Assume 40% ordinary and capital gains tax rates.

a. What is the book value of the machine?

b. Calculate the firm's tax liability if it sold the machine for each of the following amounts:

$100,800?; $58,800?; $4,200?; and $2,900.

Round to the nearest dollar

Reference no: EM131339850

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