DMA Company is considering the purchase of a new digital camera for the maintenance of design specifications by feeding digital pictures directly into an engineering workstation. The capital investment requirement is $345000 and the estimated market value of the system after a six-year study period is $115000. Annual revenues attributable to the new camera system will be $120000 and additional annual expenses will be $22000. The corporation's minimum acceptance rate of return (MARR) is given at 20% per year. You have been asked by management to do engineering economic analysis of this project.

i) Determine the rate of return (ROR), i*, by taking MARR as the starting point for trial and error.

ii) If depreciation follows the straight line (SL) approximate after-tax ROR at the effective tax rate, Te of 40%. Compare the value with before-tax ROR.