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What is the book value of the? equipment

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Reference no: EM133069565

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 $300 000.The depreciation rate is 40?%.

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

b. If Jones sells the equipment today for $76 000 and 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.)

a. The book value of the equipment after the third year is ?$(). ?(Round to the nearest? dollar.)

b. If Jones Company sells the equipment today for $76 000 and its tax rate is 30%?, the total? after-tax proceeds from the sale will be
?$(). ?(Round to the nearest? dollar.)

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. ? (Select the best choice? below.)

A. ?No, Jones already owns the? machine, so there is no cost to using it for the order.

B. ?Yes, the cost of taking the order is the lost $64 800 in book value.

C. ?Yes, the cost of taking the order is the extra depreciation on the machine.

D. ?Yes, the cost of taking the order is the lost? after-tax cash flow of $72 640 from selling the machine.

Reference no: EM133069565

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