Question: 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

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. Compute the after tax rate of return, based on MACRS depreciation and a 34% combined corporate income tax rate.

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