An automaker is buying some special tools for $100,000. The tools are being depreciated by double declining balance depreciation using a 4-year depreciable life and a $6,000 salvage value. It is expected the tools will actually be kept in service for 6 years and then sold for $6,000. The before-tax benefit of owning the tools is as follows:

Year	Before Tax Cash Flow
1	$ 40,000
2	$ 40,000
3	$ 45,000
4	$ 45,000
5	$ 15,000
6	$ 15,000
	$6,000 selling price

Compute the after-tax rate of return for this investment situation, assuming a 40% incremental tax rate.

Hint: It can be set up as follows

You need to complete the table and determine the IRR of the ATCF.

ATCF $ (100,000.00) Year BTCF DDB Taxable Inc nc Taxes 0 (100,000.00) 1 $40,000.00 $50,000.00 (10,000.00) 4,000.0044,000.00