$1.$ Use the given financial statement information to answer the following question:

Existing equipment

Initial cost: $$70,000$ five years ago

Depreciation: $10$ yrs

Salvage value: $$10,000$

Current market value: $$20,000$

Annual labor expense: $$50,000$

Annual net working capital increase: $$300($beginning year $1)$

Cost of capital: $5\%$

What is the current book value of the existing equipment?

$-$ $$10,000$

$-$ $$20,000$

$-$ $$40,000$

$-$ $$50,000$