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The Jones Company has just completed the third year of a? 5-year diminishing value recovery period...

The Jones Company has just completed the third year of a? 5-year diminishing value recovery period for a piece of equipment it originally purchased for $ 297 000. The depreciation rate is

40%.

a. What is the book value of the? equipment?

b. If Jones sells the equipment today for $ 79 000and its tax rate is 30 %, what is the? after-tax cash flow from selling? it?

c. Just before it is about to sell the? equipment, Jones receives a new order. It can take the new order if it keeps the old equipment. Is there a cost to taking the order and if? so, what is? it? Explain.? (Assume the new order will consume the remainder of the? machine's useful? life.)

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jeff jeffy answered 1 year ago
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