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Question: A special power tool for plastic products costs $400,000, has a 3-year useful life, no salvage va...

Show transcribed image text A special power tool for plastic products costs $400,000, has a 3-year useful life, no salvage value, and uniform annual benefits of $200,000 a year. a. Compute the before-tax rate of return. b. Compute the after-tax rate of return, based on MACRS depreciation (given this is a 3 year property) and a 34% corporate income tax rate. (you may want to use Excel to solve this).

A special power tool for plastic products costs $400,000, has a 3-year useful life, no salvage value, and uniform annual benefits of $200,000 a year. a. Compute the before-tax rate of return. b. Compute the after-tax rate of return, based on MACRS depreciation (given this is a 3 year property) and a 34% corporate income tax rate. (you may want to use Excel to solve this).