A special power tool for plastic products costs $400, has a 4-year useful life, no salvage value

Question:

A special power tool for plastic products costs $400, has a 4-year useful life, no , and a 2-year before-tax payback period. Assume uniform annual end-of-year benefits.
(a) Compute the before-tax rate of return.
(b) Compute the after-tax rate of return, based on MACRS depreciation and a 34% corporate income tax rate.
Salvage Value
Salvage value is the estimated book value of an asset after depreciation is complete, based on what a company expects to receive in exchange for the asset at the end of its useful life. As such, an asset’s estimated salvage value is an important...