Compute the annual rate of return on this machine using the

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Assume that a machine costing $300,000 and having a useful life of five years (with no salvage value) generates a yearly income before depreciation and taxes of $100,000.
Required:

Compute the annual rate of return on this machine (using the beginning-of-year book value as the base) for each of the following depreciation methods (assume a 25% tax rate):

a. Straight-line

b. Sum-of-the-years" digits

Reference no: EM13573798

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