Problem:
The Jones Company has just completed the third year of a five-year MACRS recovery period for a piece of equipment it originally purchased for $300,000.
Required:
Question 1: What is the book value of the equipment?
Question 2: If Jones sells the equipment today for $180,000 and its tax rate is 35%, what is the after-tax cash flow from selling it?
Note: Give you opinion citing relevant ethical principles.