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

80.2K

Verified Solution

Question

Finance

The Jones Company has just completed the third year of a?five-year MACRS recovery period for a piece of equipment itoriginally purchased for $298,000.
a. What is the book value of the?equipment?
b. If Jones sells the equipment today for$183,000 and its tax rate is 35 % what is the? after-tax cash flowfrom selling? it?
c. Just before it is about to sell the?equipment, Jones receives a new order. It can take the new order ifit keeps the old equipment. Is there a cost to taking the order andif? so, what is? it? Explain.? (Assume the new order will consumethe remainder of the? machine's useful? life.)
Note?: Assume that the equipment is put intouse in year 1.

Answer & Explanation Solved by verified expert

4.5 Ratings (856 Votes)

Answer aBook value of the equipment 8582400WorkingGivenThe Jones Company has just completed the third year of See Answer

Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:

Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!

Become a Member

Transcribed Image Text

The Jones Company has just completed the third year of a?five-year MACRS recovery period for a piece of equipment itoriginally purchased for $298,000.a. What is the book value of the?equipment?b. If Jones sells the equipment today for$183,000 and its tax rate is 35 % what is the? after-tax cash flowfrom selling? it?c. Just before it is about to sell the?equipment, Jones receives a new order. It can take the new order ifit keeps the old equipment. Is there a cost to taking the order andif? so, what is? it? Explain.? (Assume the new order will consumethe remainder of the? machine's useful? life.)Note?: Assume that the equipment is put intouse in year 1.