On january 2, 2017, orange corporation purchased equipment for $300,000 with an ads recovery period of 10 years and a macrs useful life of 7 years. section 179 was not elected. macrs depreciation properly claimed on the asset, including depreciation in the year of sale, totaled $79,605. the equipment was sold on july 1, 2018, for $290,000. as a result of the sale, the adjustment to taxable income needed to arrive at current e & p is:

Rate of return douglas keel, a financial analyst for orange industries, wishes to estimate the rate of return for two similar-risk investments, x and y. douglas's research indicates that the immediate past returns will serve as reasonable estimates of future returns. a year earlier, investment x had a market value of $27 comma 000; and investment y had a market value of $46 comma 000. during the year, investment x generated cash flow of $2 comma 025 and investment y generated cash flow of $ 6 comma 770. the current market values of investments x and y are $28 comma 582 and $46 comma 000, respectively. a. calculate the expected rate of return on investments x and y using the most recent year's data. b. assuming that the two investments are equally risky, which one should douglas recommend? why?