Calculate the before-tax and after-tax rates of return

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Reference no: EM131947294

A manufacturing firm purchases some machinery in January for $1,000,000. The machinery has an estimated life of 5 years, with an estimated salvage value of $200,000. The use of this machinery should generate $400,000 before-tax profit each year over its 5-year useful life. Calculate the before-tax and after-tax rates of return if the company uses declining balance at 150% to depreciate their assets.

Reference no: EM131947294

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