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# Using a spreadsheet Remington Inc.

Using a spreadsheetRemington Inc. purchases a machine that costs $700,000 and has an estimated useful life of 10 years, a MACRS property class 7 and an estimated salvage value of $75,000 after 10 years. It was financed using a $200,000 down payment and a loan of $500,000 over a period of 5 years with interest at 5%. Loan payments are made in equal amounts (principals plus interest) over the 5 years.(a) What is the amount of MACRS-Class 7 depreciation taken in the third year?(b) What is the book value at the end of the third year?(c) Returning to the original situation, what is the amount of the MACRS-Class 7 depreciation taken in the third year if the machine is also sold during the third year?(HINT: You should ask yourselves whether the loan information is relevant or not)