Ween Berhad is considering the purchase of a new piece of equipment to replace the current equipment. The new equipment costs RM75,000 and requires RM5,000 in installation costs. It shall be depreciated under MACRS using a 5-year recovery period (See MARCS in Appendix to Question Paper). The old piece of equipment was purchased 4 years ago for an installed cost of RM50,000; it was being depreciated under MACRS using a 5-year recovery period. The old equipment can be sold today for RM55,000 net of any removal or cleanup costs. As a result of the proposed replacement, the firm's investment in net working capital is expected to increase by RM15,000. The firm pays tax at a rate of 40%.
(a). Calculate the book value of the old piece of equipment.