Using excel: show equations A investment of $400,000 in a machine produces before-tax net revenue of $100,000/yr for 10 years, at which time the machine will have a salvage value of $15,000. We assume $250,000 is borrowed at 15 % annual compound interest and repaid in 10 years. We will use a 10 year planning horizon, a 40% tax rate, a 10% BTMARR, and SLN depreciation. Determine (i) ATMARR, and then the preferred payment plan based on ATPW and determine the ATFW, ATAW, ATIRR, and ATERR for each of the following four plans: e) Plan 1: Pay interest each period, but make no principal payment until the end of the loan period f) Plan 2: Make equal end-of period principal payments and pay interest each period on the unpaid balance at the beginning of the period g) Plan 3: Make equal end-of period payments over the loan period h) Plan 4: Make no payment until the end of the loan period
Using excel: show equations
A investment of $400,000 in a machine produces before-tax net revenue of $100,000/yr for 10 years, at which time the machine will have a salvage value of $15,000. We assume $250,000 is borrowed at 15 % annual
Determine (i) ATMARR, and then the preferred payment plan based on ATPW and determine the ATFW, ATAW, ATIRR, and ATERR for each of the following four plans:
e) Plan 1: Pay interest each period, but make no principal payment until the end of the loan period
f) Plan 2: Make equal end-of period principal payments and pay interest each period on the unpaid balance at the beginning of the period
g) Plan 3: Make equal end-of period payments over the loan period
h) Plan 4: Make no payment until the end of the loan period
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