A special power tool for plastic products costs $400, has a 4-year useful life, no salvage value

Question:

A special power tool for plastic products costs $400, 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% corporate income tax rate.

Depreciation
Depreciation is an important concept in accounting. By definition, depreciation is the wear and tear in the value of a noncurrent asset over its useful life. In simple words, depreciation is the cost of operating a noncurrent asset producing... Salvage Value
Salvage value is the estimated book value of an asset after depreciation is complete, based on what a company expects to receive in exchange for the asset at the end of its useful life. As such, an asset’s estimated salvage value is an important...