You will need to break down the data and then create a depreciation/tax table with these headings: Year, CFBT, Depreciation, Book Value, Taxable Income, Taxes, and CFAT. Be mindful that to compute the Total CFAT for year 8 needs to consider the normal CFAT for year 8 from the table AND the Selling Price, Capital Gain Tax, Recaptured Depreciation Tax! Then draw the CFD for the CFAT for years 0 through 8. From this CFD write the NPW Balancing Equation and compute the Rate of Return (lecture 8). Iteration is required.

(25 Pts.) 1. A retired couple plans to purchase a rental property for $400,000. It is expected that the annual income before taxes will be $31,000 for the next 8 years. It is also expected that the property can be sold for $469,000 at the end of that time period. The applicable effective tax rate is 52%. The annual operating cost is projected to be $4500 and the gain on the property sale will be taxed at 40%. a. Tabulate the cash flow after taxes for the years of ownership using straight- line depreciation over a 20-year life with a 40% salvage value. b. Determine the Rate of Return on the after tax cash flows