Englehard purchases a slurry-based separator for the mining of clay that costs \($700,000\) and has an estimated useful life of 10 years, a MACRS-GDS property class of 7 years, and an estimated salvage value of \($75,000\) after 10 years.

It was financed using a \($200,000\) down payment and a loan of \($500,000\) over a period of 5 years with interest at 10 percent. Loan payments are made in equal annual amounts (principal plus interest) over the 5 years.

a. What is the amount of the MACRS-GDS depreciation taken in the third year?

b. What is the book value at the end of the third year?

c. Returning to the original situation, what is the amount of the MACRS-GDS depreciation taken in the third year if the separator is also sold during the third year?