12-24 A firm may invest in equipment that will be d A epreci- ated by double declining balance depreciation conversion to straight-line depreciation in year 5 For depreciation purposes a $700,000 salva at the end of 6 years is assumed. But the actual value is thought to be $1,000,000, and it is this sum that is shown in the before-tax cash flow. with Before-Tax Cash Flow (in $1000) Year $12,000 1,727 2,414 2,872 3,177 3,358 1,997 1,000 Salvage value 4 If the firm wants a 9% after-tax rate of return its combined incremental income tax rate is determine by annual cash flow analysis whether investment is desirahle 34%, the