Problem 3: (15 Points) The taxable income for company A is $120,000. The managements decide to purchase some new machines for $10,000, resulting in annual saving of $2,000. The machines have a salvage value of $1,000 at the end of its 5-year life. Using 2018 Tax Rate a. Determine the before-tax rate of return b. Using the straight-line (SL) depreciation, evaluate the after-tax rate of return c. If MARR is equal to 8%, would you agree with the new purchase? As soon as possible needed

Problem 3: (15 Points) The taxable income for company A is $120,000. The managements decide to purchase some new machines for $10,000, resulting in annual saving of $2,000. The machines have a salvage value of $1,000 at the end of its 5-year life. Using 2018 Tax Rate a. Determine the before-tax rate of return b. Using the straight-line (SL) depreciation, evaluate the after-tax rate of return c. If MARR is equal to 8%, would you agree with the new purchase? Table 12-1 Corporate Income Tax Rates 2017 2018 Taxable income Tax Tax Rate Rate Not over $50,000 156 550.000-75,000 $75.000 100.000 $100,000-335.000 $335.000-10 million $10 million-15 million S15 million-18.333333 >$18333333 349214