As part of the initial outlays to get the ABC Company up & running, they needed to purchase $$255,000$ in equipment. It also cost $$12,500$ for delivery of the equipment and $$63,500$ in installation costs.

A$.$ Develop a depreciation table for the asset$($s$)$ utilizing the $7-$year MACRS schedule

B$.$ What is the $$Book Value$$ of the asset$($s$)$ at the end of year $4?$

C$.$ If ABC Company decides to sell the assets for $$100,000$ at the end of year nine $(9),$ how much taxes would ABC Company have to pay as a result of this transaction?

Assumptions:

o ABC Company breaks$-$even that year $($realizing a profit of $$0)$ before the sale $($so the tax paid by ABC will be a result of the sale of this asset only$)$

o Capital Gains Tax Rate is $20\%$

o Ordinary Tax Rate is $30\%$

Answer rating: 100% (QA)

A Depreciation Table Year MACRS Rate Depreciation Expense Accumulated Depreciation Book Value 1 3333 ... View the full answer