Problem
A special power tool for plastic products costs $400,000 has a 4-year useful life, no salvage value, and a 2-year before-tax payback period. Assume uniform annual end-of-year benefits.
(a) Compute the before-tax rate of return.
(b) Compute the after-tax rate of return, based on MACRS depreciation and a 34% combined corporate income tax rate.
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.