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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Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.