Calculate depreciation charges (use full-year charge for 4^th year).

Purchase Price of Laser Cutting Machine $400,000	Selling Price of Laser Cutting Machine $200,000	Annual Income on laser first 4 years $80,000
Contract length	4 Years with possible 4 year extension	No renewal on Contract after 4 years
MACRS depreciation as a 7 year property for taxes	Income taxes= 39%	After Tax Rate= 10% return