Question: Problem 1 2 - 1 9 . The Shellout Corp. owns a piece of petroleum drilling equipment that costs $ 3 0 0 , 0

Problem 12-19. The Shellout Corp. owns a piece of petroleum
drilling equipment that costs $300,000 and will be depreciated
over 10 years by double declining balance depreciation. There is
a combined 30% tax rate. Shellout will lease the equipment to
others and each year receive $165,000 in rent. At the end of 5
years, the firm will sell the equipment for $80,000. What is the
after-tax rate of return Shellout will receive from this equipment
investment?

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