Engineering Economy 7th Edition by Leland Blank ,Anthony Tarquin

تمرين 25

Freeman Engineering paid $28,500 for specialized equipment for use with its new GPS/GIS system. The equipment was depreciated over a 3-year recovery period using MACRS depreciation. The company sold the equipment after 2 years for $5000 when it purchased an upgraded system.
a) Determine the amount of the depreciation recapture or capital loss involved in selling the asset.
b) What tax effect will this amount have