Depreciation and Rate of Return

Burrell Company purchased a machine for $$20,000$ on January $2,$ Year $1.$ The machine has an estimated service life of $5$ years and a zero estimated residual value. The asset earns income before depreciation and income taxes of $$10,000$ each year. The tax rate is $21\%.$

Required:

Compute the rate of return earned $($on the average net asset value$)$ by the company each year of the asset's life under the straight$-$line and the double$-$declining$-$balance depreciation methods. Assume that the machine is the company's only asset.

Straight$-$line method. If required, round to one decimal place.

Year $1\%$

Year $2\%$

Year $3\%$

Year $4\%$

Year $5\%$

Double$-$declining$-$balance depreciation method. Round to two decimal places. Round your intermediate dollar value calculations to the nearest whole number.

Year $1,\%$

Year $2\%$

Year $3\%$

Year $4\%$

Year $5\%$