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Troy Industries purchased a new machine 4 year(s) ago for $82,000. It is being depreciated under...

Troy Industries purchased a new machine 4 year(s) ago for $82,000.

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

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: $98,400​; $57,400​; $13,940​; and $9,800.

a. The remaining book value is

​$           . (Round to the nearest​ dollar.)

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​%

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