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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.
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