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2. Consider the following net cash flow of a new machine whose useful life is 5 years and salvage value is 5,000 $. Year Cash
2. Consider the following net cash flow of a new machine whose useful life is 5 years and salvage value is 5,000 $. Year Cash 0 -65,000 1 20,000 2 25,000 3 30,000 4 35,000 5 40,000 Double declining balance depreciation is used for the depreciation of the machine. Capital gains are taxed at 30% and ordinary income is taxed at 40%. Calculate the rate of return of after tax cash flow
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