The Jones Company has just completed the third year of a five-year MACRS recovery period for...

 

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The Jones Company has just completed the third year of a five-year MACRS recovery period for a piece of equipment it originally purchased for $300,000. a. What is the book value of the equipment? b. If Jones sells the equipment today for $176,000 and its tax rate is 21%, what is the after-tax cash flow from selling it? Note: Assume that the equipment is put into use in year 1. The Jones Company has just completed the third year of a five-year MACRS recovery period for a piece of equipment it originally purchased for $300,000. a. What is the book value of the equipment? b. If Jones sells the equipment today for $176,000 and its tax rate is 21%, what is the after-tax cash flow from selling it? Note: Assume that the equipment is put into use in year 1.

Answer rating: 100% (QA)

To calculate the book value of the equipment we need to determine the accumulated depreciation over ... View the full answer