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5. You bought a 5-year property class equipment for $20,000.00 and sold it after 3 years. Assume that the selling price of the equipment decreases

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5. You bought a 5-year property class equipment for $20,000.00 and sold it after 3 years. Assume that the selling price of the equipment decreases uniformly by 5% each year. The equipment generated following income: $5,000, $5,500, and $4,500 in years 1 through 3, respectively. Fill up the table below to show the after tax cash flow. Assume that you are already in the 28% income tax bracket. Use MACRS depreciation. Assume that depreciation recapture/loss is taxed at 15%. Yr. Income Depreciation Taxable Income Income Tax After tax cash flow b) Write down the equation to determine the after tax rate of return. DO NOT compute the rate of return

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