Book Value and Taxes on sales of assets: Troy industries purchased a new machine three years ago for $80,000. It is being depreciated under MACRS with a 5-year recovery period using the percentages given in table 4.2 on pg. 117 assume a 40% tax rate.
A. What is the book value of the machine?
B. Calculate the firms tax liability if it sold the machine for each of the following amounts: $100,000; $56,000; $23,200; and $15,000.