CSUF-S17 HW #4 EGME401 Problem 1- The Shellout Corp. owns a piece of petroleum drilling equipment that costs$100,000 and will be depreciated over 10 years by double declining balance depreciation (DDB). There is a combined 40%tax rate. Shellou will lease the equipment to others and each year receive $30,000 in rent. At the end of 5 years, the firm will sell the equipment for$35,000. Complete the table below and determine the after-tax rate of return Shellout will receive from this equipment vestment? DDB Depreciation BV (Book TI Taxable income Taxes TaxCashflow) Year (Before Tax t Cash Flow) Value) Total Depreciation Rate of Return (ROR) Problem 2 A firm has invested $250,000 in car-washing equipment. They wildepreciate the equipment by sum-of- years'-digits depreciation (SOYD), assuming a $50,000 salvage value at the end of the 5-year useful life. The firm is expected to have a before-tax cash flow, after meeting all expenses of operation (except depreciation), of $90,000 pe year. The firm's combined corporate tax rate is 30%. If the projected income is correct, the equipment can be sold for $50,000 at the end of 5 years. Complete the table below and determine what after-tax rate of return would the corporation receive from this venture? ATCF (After TI Taxable Year (Before Tax Dt Income) Income Taxes Tax Cash flow) BV (Book Cash Flow) Value) Total Depreciation Rate of Returm (ROR) Page 1 of 4